Amazon Pay, the digital payments division of Amazon India, has been bestowed with a payment aggregator (PA) license by the Reserve Bank of India (RBI), situating it among the exclusive cohort of entities authorized to proffer online merchant payment services.
The endorsement, received on February 20, empowers Amazon Pay to function as a payment aggregator and facilitate e-commerce transactions seamlessly via its platform.
Augmenting merchant payment enterprise
Underpinned by this authorization, Amazon Pay endeavors to enrich its merchant payments enterprise, a pivotal domain given Amazon’s extensive online retail presence in India.
The corporation articulates its objective of streamlining operations and realizing the ambitions of merchants and clientele by furnishing secure, convenient, and gratifying digital payment encounters. This progression is anticipated to fortify Amazon Pay’s dissemination networks and empower it to dispense inventive solutions nationwide.
What implications does this license carry for Amazon Pay?
The Payment Aggregator license confers upon Amazon Pay the capacity to serve as an intermediary between merchants and payment processors or financial institutions, consolidating payments on behalf of numerous merchants before disbursing the funds accordingly.
This framework holds profound significance for enterprises engaged in online marketplaces or platforms hosting multiple vendors. The licensure assures compliance with the financial and security benchmarks stipulated by the RBI, thereby consolidating its foothold in the fintech sector.
Integration into the milieu of licensed aggregators
With the acquisition of this license, Amazon Pay assimilates into an expanding array of entities granted the PA license by the RBI since December 2023, encompassing prominent entities such as Zomato, Google Pay, Zoho, Razorpay, and Cashfree.
Preceding the acquisition of the PA license, Amazon Pay operated under a Prepaid Payment Instruments (PPI) license, boasting 6.6 crore wallets issued and facilitating over 40 lakh transactions in January 2024 alone.
Despite recording a net deficit in the preceding fiscal period, the novel license signifies a significant opportunity for Amazon to fortify its e-commerce payments enterprise and extend its services to vendors seeking to peddle merchandise online.
