After announcing a credit service allowing instant credit at zero per cent interest for products bought on Amazon India, e-commerce giant Amazon may soon be faced with competition from WhatsApp, whose parent company has also expressed interest in offering credit facilities to customers in India.
On Wednesday, Amazon opened up its Pay Later facility for lakhs of customers in India. The move is likely to help customers hit by the economic fallout of the COVID-19 pandemic and lockdown.
The facility allows customers to pay bills or buy essentials, electronics and clothing items via zero-interest credit, provided the amount is paid the next month; barring which, the amount can get converted to EMIs up to 12 months at “nominal interest rates”. Amazon already offers no-cost EMI on select products.
“As a pilot, this unique service was available to a small set of customers and Amazon Pay has now extended this service to lakhs of eligible customers. Amazon Pay has partnered with Capital Float and The Karur Vysya Bank(KVB) to design and enable ‘Amazon Pay Later’ service for its eligible customers,” Amazon India said in a blog post.
The company says credit can be availed without needing a credit card, for amounts up to Rs 20,000. In the FAQs on Pay Later availability, it says that EMIs for amounts up to Rs 60,000 can be available for periods up to six months.
Registration requirements include completing KYC for Amazon Pay via the mobile app, with inputting the PAN card number being mandatory. However, Amazon will only offer the feature to customers it deems eligible.
In a statement, Mahendra Nerurkar, Amazon Pay India CEO, says the facility is a "unique service that will help customers expand their access to credit and experience most convenient option of making payments".
Meanwhile, according to TechCrunch, WhatsApp is also considering launching credit facilities in India, based on regulatory filings accessed by the news website which listed offering credit or loans as one of the “main objects to be pursued by it in the country” for Facebook-owned WhatsApp.
However, WhatsApp has yet to receive permission to completely roll out its Pay services in India, which have so far been limited to a pilot project of one million users, later extended to ten million in February. Since the company has over 400 million users in India, adherence to data localisation norms has been one of the concerns raised by the National Payments Corporation of India (NPCI).
Recently, Reliance Jio launched JioMart in select areas in India, allowing customers to order groceries via WhatsApp.
Walmart-owned Flipkart, Amazon’s rival in the Indian e-commerce space, also has a ‘Pay Later’ option for customers, with “Instant Credit” up to Rs 5,000 for customers.
According to market research firm Forrester, 94 per cent of Indians in metro cities are now using digital retail payments, with the number of online buyers expected to grow at 17 per cent annually from 2018 to 2023.
The total value of the Indian digital payments sector is estimated to reach $1 trillion by 2023, according to Credit Suisse.
