Amazon continues to invest heavily in India as it has launched a peer-to-peer (P2P) payments system via Amazon Pay for Android users in the country. Amazon Pay customers can now make instant bank-to-bank transactions through the Amazon app. This will now allow Amazon Pay users to settle their bills as well as other expenses with friends. They can also lend or return money to their family, pay for services on the app among other things. This new P2P service will also enable customers to make payments directly from their bank account to local vendors or to delivery associates of Amazon at the doorstep, and these individuals will scan a UPI QR code within the Amazon app to confirm the payments.
The P2P service is built on the UPI platform which is backed by the government of India, and it is regulated by the Reserve Bank of India. The UPI platform is designed for instant transfer of funds between bank accounts using a mobile device. By using Amazon Pay, customers can now send or receive P2P payments by entering their UPI ID or the recipient’s bank account or just by choosing a contact from their phone’s address book.
When contact is chosen on the app, Amazon will automatically detect if that person is registered on the UPI platform and then enable the bank transfer. If Amazon detects that the contact is not registered on the UPI platform, then the customer will have the alternative option to pay through another bank account or UPI ID.
Amazon Pay also allows Indian customers to make repeat payments more easily by showing a history of their recent transactions on the app. All the payments done through the platform are secured through a multi-factor authentication system which involves the customer’s SIM details, phone number, and the UPI PIN.
When the money is successfully transferred, both the recipient and the customer will get an in-app notification and SMS alert.
Vikas Bansal, who is the director of Amazon Pay aims to make the platform one of the most convenient and trusted way to pay for their customers. Millions of users in India trust the Amazon app and Amazon continues to expand payment use cases directly on the app.
Amazon will be aided with this move, as it continues to compete with Reliance Industries Limited (RIL) in the Indian market. Recently, Amazon has also launched an initiative to manage the B2B inventory supply and management of local mom-and-pop stores in the region. This is running as a pilot program in three cities and if it proves to be successful, then Amazon will roll out this initiative on a nationwide level.
There are more 12 million mom-and-pop stores in India, and these stores account for almost 90 percent of the retail business in India. However, only 3 percent of these stores are tech-enabled. Thus, it represents a huge opportunity for Amazon, as these local stores are currently trying to embrace technology and compete with the online retail giants.
Amazon Pay’s P2P system can bring the country’s cash-based merchants and customers into the digital era. At the same time, it will also work to bring e-commerce to the region and introduce cashless payments as well as other online services to these neighborhood stores.