Amazon (AMZN) is considering transitioning its payment offering in India, Amazon Pay, into a standalone app, according to an exclusive TechCrunch report. This move is part of the e-commerce giant’s strategy to boost usage of Amazon Pay in the country, as three sources familiar with the matter told TechCrunch. Currently, Amazon Pay is integrated within Amazon’s main e-commerce app in India. The service allows users to transfer money, pay bills, buy insurance, and invest in mutual funds and digital gold.
Details of Amazon Pay
According to the report, Amazon has been contemplating separating its payment service into a standalone app for the past year and has sought approval from the National Payments Corporation of India (NPCI) to do so. The NPCI is a state-owned organization in India that operates retail payments and settlement systems in the country.
Should Amazon secure approval to launch Amazon Pay as a standalone app, the company may encounter the challenge of issuing new Unified Payment Interface (UPI) IDs to its users. As a quick overview, UPI is a banking system that enables users to transfer money through payment apps, with UPI IDs serving as unique addresses for users on the network.
Amazon Pay Struggles to Compete in India
In light of the current landscape, some Amazon executives believe that a separate app could boost recognition for Amazon Pay in India. However, it’s important to note that there is also the possibility that the tech giant may change or abandon these plans. The report further highlights that Amazon Pay currently ranks sixth on the UPI network, processing 72.4 million transactions in July. This figure represents just 0.5% of all transactions on the network, significantly trailing competitors like Walmart’s (WMT) PhonePe and Google’s (GOOGL) Google Pay, which processed 6.9 billion and 5.3 billion transactions, respectively, in the same month.
Is Amazon a Buy or Hold Stock?
Analysts remain bullish about AMZN stock, with a Strong Buy consensus rating based on 41 Buys and one Hold. Over the past year, AMZN has increased by more than 30%, and the average AMZN price target of $223.58 implies an upside potential of 25.5% from current levels.
