Charting out its offline plans, Amazon bolsters its 'Pay' with P2P service

The launch of P2P payments will help Amazon customers make instant bank-to-bank transfers using UPI platform on the Amazon app.

Getting things right before its impending war with Reliance Industries (RIL), online marketplace giant Amazon India on Sunday announced the launch of person-to-person (P2P) payments on Amazon Pay.

This move is critical in the run-up to launching its business-to-business (B2B) services for kirana stores as expanding its offline transaction base.

The company is planning to bundle the payments services with goods and services tax (GST) invoicing as well as lending services to create back-end payments and an inventory management mechanism for offline traders. 

Reliance Jio’s ‘new commerce’ plans include inventory management and providing point-of-sale devices, which would help kirana store owners to manage inventory, accept digital payments, and, via Jio GST, create GST invoices.

The launch of P2P payments will help Amazon customers make instant bank-to-bank transfers using the Unified Payments Interface (UPI) platform on the Amazon app. 

Customers can use this functionality to settle bills, lend, pay rents, pay for services, etc. The company says this would give a major boost to offline transactions.

“Customers can also make payments from their bank accounts to local stores nearby or to Amazon delivery associates at the doorstep by scanning UPI quick response codes using the Amazon app. Customers lack simple and intuitive ways of making money transfers. The current experience is suboptimal due to lack of standard user interface, mandatory cool-off restriction for new contacts, and multiple login steps. Bank transfers are a high customer-friction process, especially for low value, high frequency payments,” said Vikas Bansal, director, Amazon Pay.

With the help of P2P payments, Amazon Pay can now be used at 10-million-plus locations, which would help it increase its reach in tier-III and other towns in India. This would also help it increase its offline reach at not only major retailers but also kirana stores, tuck shops as well as mom-and-pop stores throughout the country. The company claims more than 60 per cent of transactions happening on the platform are digital. With P2P payments in the mix, the percentage can go north of 90 per cent.

Amazon India has started a B2B inventory supply and management pilot programme for grocery stores in three cities in Karnataka.

The Amazon Distribution division handles the B2B side of the fast-moving consumer goods and other products business with retailers and kirana store owners. 

“The Amazon Distribution project is going on in Bengaluru, Mysuru, and Tumkur. The company is seeing good traction there. Amazon has consolidated everything together under the Amazon Distribution marketplace. Retailers and kirana store owners can order online and products are delivered at the doorstep the next day,” said a source close to Amazon.

The company is going to offer a bouquet of services, including GST invoices, competitive rates, and managing back-end inventory too. They might also give out freebies such as refrigerators and other equipment to bring these kirana stores 

into the loop.

Amazon Pay, over one and a half years, has invested heavily in fine-tuning its payments platform to reduce payment friction, improving affordability through credit, and lending solutions as well as enhance use case to increase the habit of using its digital payments platform.

At the moment, it has more than 100 merchants on its platform, including Swiggy, FreshMenu, Dunzo, Goibibo, RedBus, and Bookmyshow, among others, on its platform. The company is planning to increase this number by as much as 10x by the end of this year. Soon it would be adding financial services as well as lending facilities to the mix.

While there have been reports that the company has launched a few pilots, sources close to the company said RIL was not in a rush to launch its ‘new commerce’ business. The company is experimenting with various technologies and business strategies.