Amazon India receives RBI approval for digital wallet service
What's the story
Amazon India has received a payment license from the Reserve Bank of India (RBI) allowing it to offer a digital wallet service to its users. With digital payments services becoming a fast growing service in India, the license will allow the American online retail giant to gain a slice of the pie. This development coincides with the new RBI guidelines for digital wallet operators.
Do you know?
Amazon becomes the latest entrant in the digital payments sector
Prior to Amazon's entry in the sector, only 84 companies operating in India held a license to operate prepaid digital wallet services.
Background
Amazon's struggle to get a license
Amazon India had applied for a Prepaid Payment Instrument (PPI) license almost a year ago. In December 2016, Amazon India had launched its Pay service in a bid to boost digital payments in India. However, the Pay service, which worked quite like other prepaid mobile wallets, was restricted to just transactions on Amazon.
Scope
No details yet on the scope of the service
No details are known yet of what the Amazon wallet will look like and whether it will sport features like bill payments. However, like other digital wallet services like Paytm, customers will be able to bypass the two step authentication process which is prevalent in other modes of online payment like credit cards, debit cards, net banking and so on.
Quote
Amazon India's statement
"We are pleased to receive our PPI licence from the RBI. Our focus is providing customers a convenient and trusted cashless payments experience. RBI is in the process of finalizing the guidelines for PPIs," said Sriram Jagannathan, the vice-president of payments at Amazon India.
RBI guidelines
The new RBI guidelines for digital wallet operators
In late March, the RBI revised its guidelines for digital wallet operators in a bid to ramp up security and customer protection. Notably, it raised the minimum capital requirements for digital wallet operators by almost five times. It furthermore introduced a directive demanding full compliance with Know-Your-Customer (KYC) norms much to the ire of many digital payments firms.