Amazon.com, Inc. (NASDAQ:AMZN) has agreed to purchase Indian payments platform Emvantage Payments Pvt Ltd as it seeks to offer local customers an in-house payments processing platform. The deal, which was executed for an undisclosed figure, will see Emvantage’s workers merge with Amazon’s Indian business in order to ensure seamless transition of the payments platform’s technology into Amazon’s e-commerce site.
Low Credit Penetration
India is a potential growth area for Amazon, since the local e-commerce transactions value is expected to hit $220bn in 2025, reported Reuters. In the near term, the market is poised to hit $100 billion by 2020.
This will see major players in India e-commerce business such as Snapdeal, Flipkart and Amazon jostle for a slice of the business. Companies that remain innovative and responsive to market needs, such as those that will offer consumers a wider range of payment options, are expected to remain afloat.
Therefore, with the credit card penetration rate in India being very low, it makes business sense for Amazon to expand the payment options available to local users.
Emvantage, which was founded in 2012 by Vivek Sagar, processes payments for online transactions executed using debit or credit cards, prepaid wallet or mobile payment tools that are infused into merchant apps.
In India, most customers shop using online wallets that are topped up via prepaid cards, brick-and-mortar stores or cash on delivery.
Other players in the Indian market that have their own customized customer payment options include Flipkart, which bought out FX Market last September; Snapdeal, which operates Freecharge and Klickpay; and Alibaba, which backs Paytm, a mobile wallet that it touts as the best alternative to debit and credit cards.
Amazon Sees Potential Growth Market..
And finally, Amazon has joined the fray with its Emvantage platform acquisition, which is expected to conclude by the end of March.
“Emvantage is a valuable addition to our team as we accelerate our payment offerings, ensuring the best in class online payment experience anywhere that customers shop with us,” said Srinivasan Rao, director of Amazon Payments India.
Amazon’s boss Jeff Bezos has been quoted on various occasions acknowledging that India is a key growth market.
During the announcement of a $2 billion investment to boost its operations in India, Bezos said:
“We see huge potential in the Indian economy and for the growth of e-commerce in India. With this additional investment of US $2 billion, our team can continue to think big, innovate, and raise the bar for customers in India. At current scale and growth rates, India is on track to be our fastest country ever to a billion dollars in gross sales.”
Recently, one of Amazon’s biggest Indian competitors, Snapdeal clinched a $200 funding deal spearheaded by Ontario Teachers’ Pension Plan and Brother Fortune Apparel, a Singaporean investment firm. This is expected to boost is war chest as it takes on Amazon and FlipKart.