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00:00 Thanks for tuning in to BQ Prime.
00:02 The festive season is coming up and there's naturally a lot of excitement among consumers
00:07 as well for online shopping as well.
00:09 Joining me for a conversation is Mr. Vikas Bansal from Amazon Pay India.
00:13 Mr. Bansal, thank you so much for taking out the time and talking to us.
00:17 Thank you for having me.
00:18 Thank you, sir.
00:20 Before we begin, and before you were addressing the media as well before this conversation,
00:25 you brought out a very exciting, very interesting data point actually that almost 77% of the
00:32 Amazon Pay customer base in Maharashtra is opting for UPI as a preferred channel of payment.
00:40 So if we talk about that in general about the whole UPI ecosystem, it is still very
00:44 dominated by a couple of players.
00:47 And Amazon Pay has somehow not been able to get that sizable chunk in my opinion.
00:51 So why is that and how do you plan to tackle that?
00:55 First of all, I think UPI is a very important and exciting innovation that India has brought
01:02 to India and now taking to the rest of the world.
01:05 So from Amazon Pay perspective, we continue to be excited and investing behind UPI in
01:11 a big way.
01:12 Now, in terms of a focus, if you think about UPI, when we started, we started out where
01:19 you could link your bank account and make payments.
01:23 Then from there, we added wallets because customers who were not having functional bank
01:29 accounts, they could link their wallets on UPI and use it everywhere.
01:33 And now building upon that, we are now also having Rupe credit card holders to be able
01:40 to link UPI and we are very excited to launch it and announce it very soon.
01:45 And we continue to invest in that direction now.
01:49 To that investment, if we look at our user growth and user base, we have more than 8
01:54 crore customers who have already signed up for Amazon Pay UPI on our platform.
01:58 So it's very large.
01:59 Now, in terms of focus, our focus has been on how do we first solve problems for large
02:05 merchants, including Amazon.in.
02:07 And from there, then we continue to take it to other merchants and then to small merchants.
02:10 So I think where we've invested and focused, we've seen some really good results.
02:16 I'll give you one data point to say our user base, our user on Amazon shopping has doubled
02:25 in the last one year.
02:27 And it shows to the investment and the product offering we are bringing to the space.
02:31 Now when you look at the overall ecosystem, there is a very large percentage of offline
02:35 scan and pay type transactions.
02:37 There are like 70-75% are those and that's where we are now focusing and investing.
02:43 If you ask me, are we bullish?
02:45 We are absolutely bullish.
02:47 Are we investing?
02:48 We are investing.
02:49 Are we getting customer love and adoption?
02:51 Absolutely.
02:52 But it's very early days.
02:53 That's what I would say.
02:54 All right.
02:55 I think it's only fair and good to be bullish as well.
02:58 And while answering this, you also brought in the point of creation of wallets.
03:02 And I think that is one another focal point here of my conversation with you.
03:07 When we talk about wallets, lately, even if I see the RBI data and the numbers as well,
03:11 the creation in terms of the number of wallets has gone up, but the transactions have not
03:16 kept in line or not kept in pace with that.
03:19 Why is that happening?
03:20 And how do you plan to improve that bit?
03:23 Yeah, see, look, wallet has a very important role to play when it comes to cash digitization.
03:31 Because when you go really outside of tier one to two, three, four cities in India, customers
03:37 are looking for a very lightweight way to open an account, put some money, their cash
03:43 into the account and use it for digital payments.
03:46 And that's where wallet has a very important role to play.
03:49 Now, when you look at it in the past, wallet was built on proprietary acceptance, proprietary
03:55 meaning that I will give you a wallet, I will build my own network of acceptance network.
04:00 And this is how I would use it.
04:02 But now, with now wallet being interoperable on UPI, it allows customers to or us as a
04:10 player to not build like a proprietary acceptance, but then plug it into UPI so that the customers
04:15 can use it everywhere.
04:16 So now, you know, you see that suddenly I'm able to put a lightweight way open an account,
04:23 put some money in, you know, don't pay any maintenance, account maintenance charges,
04:27 and then use it to pay everywhere.
04:28 So I'm not restrained by any proprietary acceptance.
04:31 And you will see that the growth is going to be pretty sizable, significant going forward,
04:37 latching again onto UPI.
04:38 To me, these are all sources of funds, and then you have UPI and how you use it.
04:43 So you will see it's pretty exciting space for us, because it's solving unique customer
04:47 problem that, you know, the other products are not able to solve.
04:51 So that's, that's, you do see growth happening.
04:54 Oh, absolutely.
04:55 I would say.
04:56 All right.
04:57 Thank you.
04:58 So before we take away from this whole payments thing, I really want to touch upon the payment
05:02 aggregator bit with you.
05:05 So you got an in-principle approval to bring it up.
05:09 Have you heard anything from the RBI?
05:11 Is there any update in where, what is the status on Amazon Pay's end at this point?
05:16 When we talk about the process, right, so, you know, you apply for it based on all the
05:22 due diligence, you get in-principle approval, then you have to, you know, conduct audits
05:27 and other requirements and what we call operationalization, and then you get the final approval.
05:33 So what we have is, as you rightly mentioned, you know, we have the in-principle approval
05:37 from RBI.
05:38 Thank you to the regulator for, you know, putting trust in us.
05:42 Now we're going through the next steps of the audit and operationalization and, and
05:47 all the formalities.
05:49 And once that is complete, we will hear back from the regulator.
05:52 So that's where we are right now.
05:53 I don't have anything more to add at this point.
05:55 As of now, you've not heard from the regulator.
05:57 No, we continue to engage with them because there's a lot of, as I said, there's an operational
06:01 part of it, operationalization, which is about audit, answering questions, you know, doing
06:06 all those things, we are in process.
06:08 Okay, fair enough.
06:09 Thank you for that clarity.
06:11 One last thing that I really want to touch upon, if we look at the payments business
06:14 in India, or largely in general, it's largely seen as a free business in terms of the earning
06:21 revenue as well.
06:23 If you could help me just understand, are there any revenue earning opportunities in
06:28 that business?
06:29 And if they are, how do you see that expanding in the near future?
06:32 Sure.
06:33 First of all, like if you think about payments in globally, right, payments is a massive
06:38 high scale, low margin business.
06:40 So I don't think it is, you know, to say like, look, it's zero indefinitely, it might be
06:47 now, but I think you will have some scale with low margins, you will have some margins
06:52 in it, right?
06:53 On top of it, let's think about merchants, merchants want to grow their sales.
06:58 And if as a payment and a player, if I can help them grow their sales and provide some
07:03 value added services like affordability, you know, like, you know, customer rewards, and
07:09 other things, loyalty solutions, if I can bring those solutions, merchants are willing
07:13 to pay, because if we are getting the sales, you know, they are willing to share some of
07:17 those with their providers.
07:19 So that's number one, right?
07:21 So there is also at the same time, there's also an opportunity from customer to say,
07:25 if I'm providing that convenience, for example, you know, you are you earlier had to go, you
07:31 know, do something and for example, pay your bill, and now you could pay at your home conveniently,
07:37 in like, literally, like in less than a second, or less than a minute, then you have a convenience
07:42 and then there is some fee that customers will be willing to pay.
07:46 So as you as the India grows, you will have revenue streams on the core business coming
07:52 from both merchants and customers.
07:54 That's number one, right?
07:55 On top of it is, you know, you have like, from there, how do you help expand credit?
08:00 And as you expand credit, can you share some margins and revenue from that?
08:05 And then from there, how do you continue to add new value added services, like, you know,
08:09 financial services, insurance, and other things where you can make some margins, I would say
08:14 like, there's definitely revenue pools, you know, it will take for market to stabilize
08:19 and for it to capture those pools.
08:22 But you know, that's what we are hoping for is how do you serve customer needs and also
08:26 run a very profitable and sustainable business.
08:29 And those are some of the ideas or opportunities that I see in the future on how, as a payment
08:34 player, we will make money or even the industry will make money in the business.
08:38 All right.
08:39 Thank you so much for that lovely chat with us, sir.
08:41 And thank you for giving the time.
08:42 Yes.
08:43 It was my pleasure.
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