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Amazon Pushes Fintech In India With New Offerings

Amazon Pushes Fintech In India With New Offerings
The financial services platform of Inc in India is no offering insurance and even gold services as the company seeks to expand its customer base and attract more subscribers to its Prime loyalty programme in the market where it there is tough competition in the fin tech sector.
The cash dependent Indian market and economy with more than 190 million adults nit having access to bank accounts has been a struggle for profitability for financial technology (fin-tech) firm and their deep-pocketed foreign backers and now Amazon is pushing deeper into that market to rival the existing fin tech companies. . 
In 2016, Amazon launched its Amazon Pay digital wallet in India to boost online payments. Since then the e-commerce giant has also launched a credit card, struck partnership with a state-backed payments network, and has started processing payments for movie and flight tickets and utility bills such as for telephones and electricity.
In July, Amazon started to offer auto insurance to customers and launched gold investment products in the market August. Both of these are a first for Amazon.
The fin tech business of Amazon in the United States have seen only modest success partly suppressed by reluctance on the part of merchants to use its services because it is the biggest retail rival of the merchants themselves.
According to tech executives, in contrast, Amazon has more than 100 million users already in the Indian market and is the company finds itself in a better place to offer financial services to customers to win them over s subscribers for its annual $13 Prime plan that offer customers faster shipping and music and video streaming.
Mahendra Nerurkar, head of Amazon Pay in India, which has so far signed up 4 million merchants, said that the aim of the company is to make Amazon Pay the preferred payment method for the country.
“Apparently Chinese fashion designers are leaving the back pockets off jeans because no one uses them anymore (for wallets),” Nerurkar told thee media. “We would love to make that happen in India.”
According to a study by professional services firm PwC and Indian lobby group ASSOCHAM, the digital payment market if India is expected to grow by more than 100 per cent by 2023 compared to the value of the market in 2019.
A digital payment drive in India was boosted by the government demonetizing high-value currency notes in late 2016 as companies such as Amazon, Alphabet Inc’s Google, Walmart Inc’s PhonePe, and Paytm, backed by SoftBank Group Corp, riding the wave of increasing digital payments.  
But tougher regulatory scrutiny has been forced since with new entrants to the market. for example, it has been two years that approval for offer payment services by Facebook Inc’s WhatsApp is pending with the government as it tries ot set up new data-localisation rules. WhatsApp has a total of more than 400 million users in India.
But the industry’s profit margins have been slim. Losses running into the hundreds of millions of dollars have been booked by Paytm, also backed by Alibaba Group Holding Ltd. on the other hand, PhonePe said it hopes to turn profitable by 2022.

Christopher J. Mitchell

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