Amazon plans to continue investing heavily in digital payments business
BENGALURU/NEWDELHI: Amazon India, which has doubled down on building out its digital payments business in the country, plans to continue investing heavily in the business and introducing more local innovations for Indian customers over the coming quarters, even as it grapples with new know-your-customer (KYC) regulations from the Reserve Bank of India which have slowed down growth of new users.
In an interview, Amazon Pay’s new India head Mahendra Nerurkar conceded that RBI regulations around mandatory KYC processes have resulted in a slowdown of new digital payments customers.
“We take customer trust very seriously and also take regulatory compliance very seriously. So, there’s no cutting corners around that. We are asking customers for their officially valid docu- ments, so that they can keep loading balances and using it. What we are seeing is that the adoption from new customers is being affected because of this. One of their primary reasons for using stored-value instruments was that it was friction-free and easy to use. And a certain amount of friction has been introduced as a result of these regulations,” Nerurkar said.
“I think we’ll need to be patient in terms of figuring out what the best regulations are...i don’t think we’ve found the right solution yet as an industry and are working very closely with the regulators to find that solution,” he added.
According to RBI’S latest guidelines, digital wallet players can issue two types of accounts. The first has a transaction limit of ₹10,000 per month, which can be opened with a one-time-password verification of a mobile number, combined with a valid identity document like a PAN card or a driving licence. The second type of e-wallet account has a transaction limit of ₹1 lakh per month — these accounts require a complete KYC, which means validating identity as well as address.
Nerurkar, however, said that despite the new regulations, the volume of Amazon India’s cash transactions has gone down significantly, while digital payments have grown since the government’s decision to ban largedenomination notes in November 2016.