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Amazon Pay has been a key player in online payment setup providing a range of services to its customers on board. With the increasing penetration of UPI, the provider has been continuously working in the direction of providing seamless experience, and talking aggressively about the voice-enablement payments system.

In an exclusive interaction with ETBFSI, Whole time Director at Amazon Pay, Vikas Bansal shared his views on UPI penetration in global market, BNPL business, role of technology in BFSI sector and much more.

Bansal also talked about ‘regulatory enablement’ to leverage technology more prominently. He was affirmative about the voice-based payments, and maintained that Amazon is working to make it convenient for the customers.

Here are the edited excerpts:

Q: How do you see the UPI penetration in the global market?

I think, the way this product was architected, it just worked wonders for both the consumers as well as the merchants, and we continue to see traction at an overall level.

At Amazon pay, we continue to invest in this as a key path, and we have a large set of our customers already using UPI.

One of the key things was that the government focus to digitise India instead of digitised payments. We had the most penetration of cash in the tier-two, three cities and we’ve noticed that UPI is also helping to penetrate those markets.

Over 75% of customers using UPI on our platform come from tier-two and three cities.

There are many new developments going on in the UPI market like the linking of UPI with your credit card, linking with the prepaid wallet account, and now we are moving to use it outside (globally).

UPI has expanded to a great extent, and creating more and more use cases.

We are very excited about the PPI linkage where now you’re able to link your wallet and then use it anywhere. Earlier, the problem with wallet was that they were not used everywhere. It was only in selected merchants but UPI has now become very democratic.

The reason why it becomes exciting is that for the customers who do not have a digitally functional bank account, they can set up a wallet and start using it. Secondly, it is also exciting because we are able to control the experience better. Hence, the success rates are higher.

The most important benefit is that now you’re able to target and go after segments of non-functional bank accounts, and expand the pie.

We at AmazonPay will continue to work with NPCI on multiple other things which will come in due course.

Q: BNPL business is expanding at a massive rate. It has catered to almost all the segments of business. How do you see its future?

India is a credit-starved country with only 3% of Indians carry credit cards. Our estimate is that about 35 to 40 million consumers have credit cards, and rest of them on unsecured credit is untapped.

We know that credit access, providing responsible credit, is a major thrust to the economic growth in the country. With the Prime Minister’s ambition of a 5 trillion economy, unsecured credit has to play a meaningful role.

At the same time, credit in itself is independently difficult, because it’s hard to acquire customers.

With BNPL, the customer’s cost of acquisition is low.

We now have one of the largest population in the age group of 18 to 24 years, which is digitally savvy.

You have a lot of these tailwinds playing in which is the demographics, lower credit growth or lower credit access. Then you have a way to solve it.

Now, we do have a way that’s very transparent to the customer. It is a loan that they’re taking. Although it is called Buy Now Pay Later, it is a loan that they’re taking by signing the required paperwork.

We have wired up with the lenders, both banks and non-banks. We continue to see traction and growth in the pay later business.

Our product is now wired up, the tailwinds are in place, and we just continue to grow from here.

Q: Technology has taken over the financial system completely. How do you see this?

We should just go back to basics on how do we use technology to get 100% success rates with no failures.

There are a lot of ways of using technology to improve end-to-end processing, the infra upgradation at the bank site among others.

We’ve come a long way as a country, but we still have some way to go. Country needs to digitise. RBI Innovation Hub has it’s mission to digitise over 1 billion KYC for which we really have to leverage technology.

There are two ways we can leverage technology. First is how KYC can be done by one then how can it be leveraged by other entities in a seamless fashion. Second is how do we use technology which are Artificial Intelligence and Machine Learning to do it without human intervention.

We will see some changes in the way we can leverage technology more prominently with the ‘regulatory enablement’.

In terms of use cases, if you look back we used to sort of deal with only paper. Then we move to clicking computer and desktops. Later we start to pay from the smartphones where we touch and pay. And from there we will go to speak and pay – the voice-based payments.

At Amazon, we are very excited about voice-enabled payments, particularly using Alexa, and working on how do we make it convenient for customers.

The customers which are in the younger cohort, for them whether it’s video consumption or using video, or sort of speaking, all of them are becoming more and more mainstream.

You can do a lot of actions upfront with just speaking, but then you still have to authenticate and complete your payment right. But we can make it completely seamless.

We also need to focus on how do we continue to penetrate in deeper parts of India, and develop the merchant ecosystem using technology like digitise stores, inventory, and entire fulfilment.

Amazon has lots of initiatives underway in small-scale pilots to help in that regard as well.

Still there is a bit of friction, and we work tirelessly on how do we remove that friction, and make it more trusted. How we make it more ubiquitous and rewarding for customers and then that’s where we also invest behind.

Q: How do you see the role of regulations and compliances in your business?

We continue to work with the regulator, to expand the payments and, financial services. We’ve seen lots of initiatives where the regulator and industry have come together to discuss the roadmap, vision.

I don’t think regulatory framework is a challenge.

Q: You have already entered into the Auto Insurance sector. How was this journey and are there further plans for more such collaborations?

At Amazon, we are working backwards from the problem. Customers don’t want ‘terms and conditions’ loaded product. They need a simple transparent product that can work digitally with a good fulfillment experience, and with the lowest pricing.

When I say fulfillment, it means claim experience, and that’s what we invented. I think it’s very early days, but our renewal rates are very high, and we also have very good customer ratings.

In future, we will do other types of insurances.

For the motor insurance, we partnered with ACKO and we’ve done this together.

Q: What steps are you taking in the direction of expanding the merchant payment ecosystem?

There’re a lot of investments in place, and the question is how do you digitise merchant’s payments?

There’re merchants who have basic acceptance, spanning across India, and we have close to 85 lakhs of those and growing. Using machine learning and other algorithms we helped them to grow their business.

We have Amazon pay smart stores where you can discover all of the catalogs on the app itself, and then see the ratings and then use it to pay.

We are bringing the offline and online together to discover the product.

There’re a lot of investments that are going on to grow the ecosystem, but it’s still very early days.

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