Amazon has injected a fresh capital infusion of Rs 600 crore (approximately $72 million) into its Indian fintech arm, Amazon Pay India, as it steps up competition with rivals such as Paytm, PhonePe, and Google Pay.
This marks Amazon’s second significant investment in Amazon Pay India this year, following a Rs 350 crore infusion in February, according to regulatory filings with the Registrar of Companies (RoC). Additionally, Amazon has allocated nearly Rs 2,500 crore in 2024 to Amazon Seller Services, which operates its e-commerce marketplace in India.
Amazon Pay India competes vigorously with Paytm, PhonePe, and Google Pay in services like bill payments, unified payments interface (UPI) payments, and other financial offerings. This fresh capital infusion occurs amid ongoing turbulence in the domestic payments market, underscored by the Reserve Bank of India’s actions against Paytm Payments Bank in February.
As of May 31, Amazon Pay India reported 67.5 million prepaid wallets and recorded 623 million transactions, amounting to over Rs 211 crore in May alone, according to RBI data. As per the National Payments Corporation of India (NPCI) data, Amazon Pay ranked as India’s fifth-largest UPI player by transaction volume in May, trailing behind PhonePe, Google Pay, and Paytm, with less than 1% market share.
In related news, several online gaming companies have received fresh summons from the Directorate General of GST Intelligence (DGGI) seeking details of the cashback issued to players since October 2023. The DGGI has discovered that these firms reimbursed taxed money back to players in the form of cashback in a separate promo account, following the implementation of the 28% GST on the full entry-level betting amount. Summons have been sent to companies, including Delta Corp, for records from October 2023 and June 15, 2024.
Typically, a player has three accounts: a deposit wallet, a payment wallet, and a promo wallet. These companies were transferring cashback into the promotional wallet of players. Legal experts argue that cashback should not be subject to GST. Abhishek Rastogi, founder of legal services firm Rastogi Chambers, stated, “When the taxes are already paid on the entire consideration paid by the user, the credit from the online companies should not be subject to further GST.”
In August, the GST Council clarified that a 28% GST was to be levied on entry-level bets on online gaming platforms and not on what players pay in each game from the winning amount. The effective date for the amendments was October 1, 2023.
This dual focus on regulatory compliance and strategic financial investments highlights the evolving landscape of India’s fintech and gaming sectors, as companies navigate stringent regulations while striving for market expansion and innovation.
