Yahoo Finance Amazon (AMZN) Infuses Fresh Capital to Boost Amazon Pay in India
Amazon AMZN is continuously making strong efforts to bolster its presence in India. This is evident from its latest fresh capital infusion of Rs 600 crore (about $72 million) into Amazon Pay India.
With this investment, the e-commerce giant strives to strengthen its digital payment app business in India. The digital payment market is booming due to the ongoing digitization and increasing adoption of cashless transactions.
According to a report from Statista, the Indian digital payment market is anticipated to generate a total transaction value worth $254.6 billion in 2024. The figure is expected to reach $394.4 billion by 2028, seeing a CAGR of 11.6% between 2024 and 2028.
Amazon remains well-poised to capitalize on the aforementioned growth prospects on the heels of its increasing investment in its digital payment app.
The latest move brings its total investment in Amazon Pay to Rs 950 crore so far this year in India. The company made an investment of Rs 350 crore in February in its payments platform.
In addition, Amazon Pay is gaining popularity in the country on the back of the services that it provides, which include bill payments, unified payments interface (UPI) payments, wealth management, ticket booking and insurance premium payments.
Moreover, Amazon Pay’s tie-ups with platforms like Bookmyshow, Makemytrip, Redbus, IRCTC, and Kuvera are positives.
As of May 31, Amazon Pay India had 67.5 million prepaid wallets and processed 623 million transactions worth over Rs 211 crore during the month.
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Strong Investments Aid Competitive Edge
The Indian digital payment space is highly competitive in nature, given the rapidly increasing number of UPI transactions, which is giving a significant boost to it.
With growing Amazon Pay investments, the Zacks Rank #3 (Hold) company ups its game against peers like Paytm, Alphabet’s GOOGL Google Pay, Walmart WMT owned Flipkart’s PhonePe and Meta Platform’s META WhatsApp Pay.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alphabet and Walmart are making concerted efforts to strengthen their presence in the booming digital payment market of India.
Recently, Alphabet’s Google signed a Memorandum of Understanding with the National Payments Corporation of India to expand the use of Google Pay to other countries. This will allow Indian travelers to make payments in other countries via Google Pay.
PhonePe is enjoying solid customer momentum on the heels of its digital wallet service, which allows users to make instant money transfers with UPI. In addition to PhonePe, Walmart’s Flipkart unveiled a UPI app called Super.Money, which offers up to 5% real cashback on transactions, pre-approved credit and fixed deposit accounts. Super.Money is currently in the beta stage.
Meanwhile, Meta is gaining steam with WhatsApp Pay, which is powered by BHIM UPI and processed by payment partners in India. The app allows users to make payments on the app using UPI apps, debit cards, credit cards and net banking.
Conclusion
Amazon is well-poised to benefit from its expansion spree in India in the near term, as well as in the long haul. Its strengthening competitive position in the digital payment space of the country is a tailwind.
In addition, the company’s growing investments to bolster its e-commerce business in India are major positives. Last year, it announced a $15-billion investment in the country over the next seven years. Amazon strives to strengthen its infrastructure in the country with this. Moreover, its pledge to build digital centers in 100 cities and villages in India to help more than 10 million small and medium businesses come online remains noteworthy.
Amazon’s growing prospects in the booming India market are expected to aid its overall financial performance.
For 2024, the Zacks Consensus Estimate for revenues is pegged at $638.24 billion, reflecting growth of 11% from that reported in 2023. The consensus mark for 2024 earnings stands at $4.58 per share, which has been unchanged over the past 30 days. The EPS estimate suggests year-over-year growth of 57.9%.
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