India moved up one place in the top ten economies list, displacing the United Kingdom from the sixth position, and it is increasingly becoming one of the most important markets for Amazon. The e-commerce giant secured a license to launch a digital wallet, which levels the playing field with two of its regional e-commerce competitors, Flipkart and Paytm, both of whom already have digital wallets of their own.
According to Indian law, customers who make purchases online need to go through two-factor authentication. With a digital wallet, that’s simplified. Customers can load up money in their accounts, and then directly use that to make purchases on the platform.
Flipkart has a digital wallet named PhonePe, and Paytm, funded by Chinese e-commerce giant Alibaba, was actually a payments processor before slowly expanding into the e-retail market.
With both its competitors having digital wallets of their own, Amazon can now neutralize that advantage by bringing its own digital wallet into the space. An integrated digital wallet reduces a lot of the friction for the customer as he or she goes through the payment process. It’s easier, its simpler, it’s one-click and the odds of a failed financial transaction are near zero.
In a country where Internet speeds can yo-yo as quickly as the weather changes, digital wallets will play a major role in online sales.
India is the fastest growing economy in the world, and the number of Internet users is expected to cross 450 million by June 2017 – that’s less than half of India’s population. As the economy expands, the Internet will reach more and more users, steadily increasing the potential market for e-commerce companies like Amazon and Flipkart.
Amazon knows the importance of India, and has already poured 5 billion into the market, and launched Amazon Prime and Amazon Video. And if reports are to be believed India might soon see Amazon’s brick and mortar stores, as the retail giant recently asked for Indian’s government’s approval to undertake retail trading of food products.
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