Bengaluru: Online marketplace Amazon Tuesday said it will buy online payments firm Emvantage Payments Pvt. Ltd to develop India-specific payments solutions.
The announcement comes shortly after Amazon infused an additional Rs.1,696 crore into its India unit (Amazon Seller Services Pvt. Ltd) in December 2015, to take on local rivals Flipkart and Snapdeal.
“Emvantage is a valuable addition to our team as we accelerate our payment offerings, ensuring the best in class online payment experience anywhere that customers shop with us,” Srinivas Rao, director, Amazon Payments India, said in a statement.
Large e-commerce companies have made significant investments, acquisitions and partnerships with payment companies to claim a share of the fast-growing digital payments vertical which helps reduce the dependency on cash and make it convenient for online shopping.
The Indian e-commerce market is estimated to grow to $100 billion by April 2020, according to an October 2015 Goldman Sachs report.
Emvantage employees will join Amazon’s payments team. The acquisition is expected to close in the first quarter of 2016, the company said.
Jasper Info Tech Pvt. Ltd-run online marketplace Snapdeal launched its mobile wallet through its utility payments unit FreeCharge in September 2015. The company had set aside Rs.1,000 crore towards cash-back offers and discounts among other initiatives to attract more consumers to FreeCharge Digital Wallet. Snapdeal had acquired FreeCharge for $450 million in April 2015.
Flipkart Ltd had acquired payments services company FX Mart Pvt. Ltd in August 2015. ANI Technologies Pvt. Ltd cab aggregator Ola had made its Ola Money digital wallet available for making payments in other e-commerce platforms.
“It is almost inevitable for companies to have a digital wallet to smoothen consumer experience,” said Sandeep Ladda, partner and national leader of technology & e-commerce sector practice at research and consultancy firm PwC India. He said that payment solutions will be an area of focus for the ‘big three’ (Amazon, Snapdeal and Flipkart).