Amazon is renewing intensity on its Indian business with the acquisition of Emvantage Payments. The size of the sum isn’t being released, but Amazon boss and founder Jeff Bezos already put a number on how much he values the region’s potential when he earmarked $2bn for investment in the country back in 2014.
New Delhi-based Emvantage offers a range of payment products including an online merchant portal, a prepaid wallet and mobile payments. All of the firm’s staff are now part of Amazon India and its technology will be integrated into the firm’s e-commerce site to help smooth the process of buying goods online.
India’s e-commerce industry is expected to be worth $100bn in four years’ time, but in the meantime low card penetration, the prevalence of cash plus complicated logistics for deliveries mean that it’s a complex space for companies trying to sell goods to consumers online. That’s why Amazon, which is up against domestic players including Snapdeal and Flipkart, needs to onboard local tech expertise and technology. With many shoppers opting to pay with escrow (cash on delivery) or using prepaid, it’s likely that Amazon will pump resources into Emvantage’s prepaid business as it attempts to get more consumers shopping on its site and pull more payments directly through its platform.
Payments, the axle on which its business turns, is a growing focus for Amazon and one where it’s had mixed results historically. Its attempts at a wallet and a mobile payments service called Register, ending in failure.
The firm recently shed light on its payments business to highlight the growth of its footprint in the space (according to Amazon). The firm’s Amazon VP of external payments Patrick Gauthier, poached from PayPal last year, said that 23m customers have now used its Pay With Amazon service to pay for goods on a third-party site and that both the number of customers and payments volume climbed 150 per cent year on year. Pay With Amazon button for third-party sites, which launched in 2013 to let customers use their Amazon credentials to pay for goods on other sites and competes with PayPal chiefly.
Amazon already holds the payment details of millions of its own customers and is therefore theoretically well-positioned to be a massive player in payments. Yet the company’s relationship with merchants, especially small merchants, is complicated. The firm has downplayed in the past queries over why merchants should trust the firm with their payments data, saying that if that were the case its marketplace model wouldn’t work at all.
The appeal is clear: as one of the world’s biggest online retailers, if it can close the loop on payments then this could be a big revenue spinner for the company. According to eMarketer, retail e-commerce dales will hit $3.6 trillion globally by 2019 and companies like Amazon, PayPal, Apple, Samsung and Alipay in China all want to be the gateway through which that money moves.
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