Amazon Pay launches EMI options for its customers
BENGALURU: Global tech giants riding the digital payments wave in India are now making going into lending. Amazon which operates Amazon Pay, a digital payments instrument, is starting Amazon Pay EMI for its ecommerce customers in India. This is being done to target that section which does not have a credit card and cannot access EMIs on debit cards.Along with lending the company is firming up its plans to enter the insurance space and wants to start selling insurance in India as a corporate agent. However, sources have suggested that Amazon is yet to apply for a licence with IRDA (Insurance Regulatory and Development Authority of India).
An Amazon spokesperson told ET, “Amazon Pay is looking to serve the needs of customers around Insurance. Stay tuned in.”
Having partnered with Bengaluru based digital lending startup Capital Float the company is starting off easy EMI options for purchases on its ecommerce platform for a select group of customers.
“Our aim is to target the next 70 million customers who are deprived of credit options while shopping on Amazon, they will be significantly benefitted by these easy EMI options especially with the festive season round the corner,” said Vikas Bansal, director, emerging payments at Amazon Pay.
Bansal added that while the size of the population doing online shopping in India is around 100 million, around 20 million have credit cards and another 10 million use either Bajaj Finance or debit card EMIs. Amazon Pay EMI is targetting the next 70 million and the incremental customer base.
“The advantage that Amazon can bring in is the huge customer base that we already have here, hence customer acquisition cost will be lower and we can pass off better rates to good borrowers,” said Bansal. “Also we will use our machine learning capabilities to reduce frauds which will also make loans cheaper.”
Amazon is said to be offering zero cost EMIs for customers taking the loan for a duration of three and six months. For those opting for the duration of nine and 12 months the rate of interest will be 18%. While offering a complete digital onboarding process, it will also allow Amazon customers to track their repayment history on the Amazon Pay dashboard thereby increasing their convenience.
“We are starting the product with offering credit limit to customers in the range of Rs 30000 to 60000, with plans to extend the upper limit slowly over time,” he added.