Vikas Bansal,Whole-time Director, Amazon Pay India spoke exclusively with businessline on a variety of topics ranging from the company’s successful co-branding tie up with ICICI Bank, introduction of credit lines through UPI and more. Edited excerpts:
You’ve had one of the most successful co-branded card partnerships with ICICI Bank. Is that something you want to take to more banks?
We were the pioneers in this space. In 2018, co-brand was never mainstream, and we thought this is a win-win for our brand. So, Amazon Pay and ICICI Bank came together and created a compelling proposition for the customers. We made sure that the customer doesn’t have to do any math to understand the terms and conditions. It’s a simple product to understand in five seconds and offers digital end-to-end fulfilment experience.
We have also added a checkout option, which is sacred for any merchant. Taking it to more banks depends on whether there is customer benefit, because the partnership with ICICI Bank is working very well. We share the same ethos in terms of brand, customer service, technology-led product experience. I don’t see a reason right now to do it (partner with other banks).
There’s a vast gap between after the No 1 and No 2 players in the UPI space. As a foreign player, are you happy having UPI as an embedded payment mode or would you want to bridge the gap?
We’re never happy; we are always wanting more. Secondly, I don’t think we’re a foreign company. We are a company floated in India and we operate like a local company run by Indians. The only thing foreign we carry is the capital we can bring in. The other benefit is that if there’s innovation in other parts of the world, we can bring it in India. Likewise, there’s a lot of innovation from here (India) we take to other countries now.
Where we want to play is the affluent segment, already shopping on Amazon. We’re going deeper in that segment. UPI is one way for you to pay. But we want to be able to serve all your needs — like credit card or even pay-later. Our share of UPI on marketplace, bill payment and other parts of the business is increasing very rapidly.
In offline, it is not as high as it should be and that’s where we are focused on. We are targeting where our customers go to. For example, we’ve gone live in Punjab Grill with our QR.
How did MDR on wallets impact? Did you see footfall reduce because of the levy?
It’s early days and it hasn’t fully percolated. Credit on UPI will have the same challenge because UPI has always been free and now people are going pay for it. We can’t take it for granted because merchants who are used to pay nothing, will now have to pay for credit on UPI, wallet on UPI and even RuPay cards. Right now, the volumes are small but if they become very meaningful, then it might have a problem.
Do you envision the adoption becoming meaningful because of the use case?
Yes, absolutely. We are also working on linking RuPay credit card on UPI. The biggest benefit for the customer is that instead of linking the bank account or wallet to UPI, on some purchases where the customers want float (avail credit) or earn rewards, linking cards gives that flexibility. It is going to be very transformational for India. But it will not be easy, because we will have to work through all the challenges on merchant acceptance. Customer education is also required.
Would you want to explore on-book credit though NBFC?
We have a pay-later product and we’re working with multiple banks and NBFCs to originate credit. If there are certain segment of customers who are good but don’t meet the bar of certain banks and non-banks, then we might step in. We continue to evaluate it. But we don’t want to do everything on our own.
How did some of the regulatory changes including the 5 per cent FLDG cap affect or improve your business?
Before the guidelines came in, there was so much noise about these illegal apps and this was a real problem. Operating in a regulated space helps us meet our ambition which is to do responsible credit, protect customers and then there is revenue or profit goal for players in the ecosystem.
We were sitting on high systemic risk prior to FLGD norms being introduced. Five per cent as a number makes sense, because if as a fintech you have confidence to go after these customers, that’s good. From first day since the launch of the pay-later product, Amazon pay has been doing full KYC and credit checks. We were the only one who made the customer sign a loan statement since launch.