Amazon pay is beginning to venture into the EMI Market in India By partnering with a Bangalore-based digital lending startup called Capital float. Amazon is going to be starting this venture by targeting individuals who do not have a credit card and currently cannot access EMI on debit cards. According to a recent, The Economic Times article Amazon is going to be offering a zero cost EMI for consumers taking on the loan for a duration of 3 to 6 months and for those individuals opting for a 9 to 12-month loan the interest will be 18%.
When looking at the market opportunity Vikas Bansal the director of emerging payments at Amazon had this to say, “ Our aim is to target the next 70 million customers who are deprived of credit options while shopping on Amazon, they will be significantly benefitted by these easy EMI options especially with the festive season round the corner.” Also, Bansal stated that when comparing India with China, “the number of people with access to credit is dismally low here. While in China 750 million people have access to credit, in the United States, the number ranges around 300 million. For India to move into a higher purchasing power bucket, there is need for innovative means of delivering quick and easy credit to shoppers.”
With Amazon launching the EMI product it looks to accomplish two main objectives. First, it looks to reduce the percent of deliveries done against cash as it claims that 40% are currently done in that manner, and second, it looks to maintain and grow its market share of EMI Services as its biggest rival Flipkart has started to push its debit EMI product. It is important to note that Amazon does have a debit card EMI option. However, that option is restricted two customers that bank with ICICI Bank HDFC bank and access bank.
As the Indian payment Market continues to mature large tech companies such as Amazon Google and Facebook are continuously finding unique ways to enter the market. Amazon which is uniquely positioned in the market May potentially have a leg up on its other US-based Tech competitors. Attacking the problem as a product provider first and a payments provider second may be just what Amazon needs to get an early advantage over its competition.
