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Amazon is reportedly contemplating a significant shift in its payments strategy in India by moving Amazon Pay into a standalone app, according to sources familiar with the matter. This move is seen as part of Amazon’s broader efforts to strengthen the presence and usage of its payment service in the rapidly growing digital payments market in India.

The Current State of Amazon Pay in India

Amazon Pay, currently integrated within Amazon’s primary e-commerce app, offers a wide range of financial services. Users can transfer money, pay bills, purchase insurance and travel tickets, invest in mutual funds and digital gold, and more. Despite these extensive offerings, It Pay has struggled to capture a significant share of the digital payments market in India, ranking sixth on the Unified Payments Interface (UPI) network. As of July, It Pay processed approximately 72.4 million transactions, representing just 0.5% of all UPI transactions, far behind competitors like Walmart’s PhonePe and Google Pay.

The Motivation Behind the Move

Sources indicate that It has been considering decoupling its payments service from its e-commerce app for about a year, with plans to execute this strategy in the coming months. Some executives within the company believe that It Pay is not receiving the attention it deserves when embedded within the e-commerce app. They argue that a dedicated app with a singular focus on payments could help It Pay gain wider recognition and better compete in the Indian market.

Challenges and Strategic Considerations

While the idea of a standalone app for It Pay is under serious consideration, the sources cautioned that It might still alter its plans, given the numerous challenges it faces in India. The country’s digital payments space is highly competitive, with players like PhonePe, Google Pay, and Paytm dominating the market. Moreover, the concept of a super app—a platform offering multiple services within a single app—has not yet seen widespread success in India, as evidenced by similar strategic moves by other companies like Flipkart.

Flipkart, Amazon’s chief rival in India, recently consolidated its fintech offerings into one vertical after initially separating from PhonePe. This consolidation suggests that the market may not be ready for super app strategies, prompting It to carefully weigh its options before proceeding.

Conclusion

Amazon’s potential move to create a standalone It Pay app in India reflects the company’s ambition to deepen its footprint in the country’s digital payments ecosystem. However, the decision is not without its risks, and It will need to navigate a highly competitive landscape to make this strategy successful. As the situation develops, it will be interesting to see how It adapts its approach to meet the unique challenges of the Indian market.

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