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Amazon Strengthens Presence in India, Gets Wallet License
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Amazon.com Inc. (AMZN - Free Report) has reportedly obtained a pre-paid instrument (PPI) or wallet license in India that allows it to offer the one-click payment option, which is otherwise not permitted by the country’s law.
Amazon now is one of the 84 companies that the Reserve Bank of India permits to operate payment licenses. The license has been given particularly to Amazon Online Distribution Services Private Limited.
Notably, the license was granted on Mar 22 but it came to light yesterday just after local player Flipkart received a whopping $1.4 billion funding from eBay (EBAY - Free Report) , Microsoft Corp. (MSFT - Free Report) and China's Tencent Holdings Ltd.
We note that Amazon’s shares appreciated 45.7% in the last one year compared with the Zacks Internet Commerce industry’s gain of 39.4%. International expansion is expected to back the momentum going ahead.
Frictionless One-click Payment Option
In online payment, the Indian law permits the two-factor authentication system (card details and CVV plus one-time password are sent to registered mobile phones or password on a bank payment gateway). The process is a bit complex and causes payment errors and delay.
The wallet system however offers a smooth payment experience. Money can be added to the wallet following the two-factor authentication system and used for future purchases without repeating the authentication process.
The wallet system allows Amazon not only ensure that money is spent only on it but also to streamline cash back, refunds and incentives payment processes that are used to attract users to Amazon Pay.
In India, Amazon, to date, has powered its gift card wallet business through Qwikcilver’s wallet license, a start-up in which it invested $10 million in 2014. The wallet license along with Amazon Pay may reduce its dependency in Qwikcilver.
Amazon’s e-commerce marketplace is currently operational in India and faces tough competition from local players such as Flipkart and Snapdeal. The company looks geared up to take advantage of the ongoing e-commerce boom in India along with growing adoption of smartphones. It has pumped $5 billion in to its Indian operations.
The focus has shifted to India given intensifying competition from Alibaba (BABA - Free Report) and slowing e-commerce growth in China. Recently, Alibaba made an attempt to strengthen its footprint in India by investing $177 million in Paytm E-Commerce. The increasing involvement reflects Amazon’s intent to expand its brand visibility in India.
We believe that if Amazon could repeat its domestic success in India, it will give it an edge over locals as well as global players such as Alibaba and eBay who are increasingly vying for a significant share of this booming market place.
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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Amazon Strengthens Presence in India, Gets Wallet License
Amazon.com Inc. (AMZN - Free Report) has reportedly obtained a pre-paid instrument (PPI) or wallet license in India that allows it to offer the one-click payment option, which is otherwise not permitted by the country’s law.
Amazon now is one of the 84 companies that the Reserve Bank of India permits to operate payment licenses. The license has been given particularly to Amazon Online Distribution Services Private Limited.
Notably, the license was granted on Mar 22 but it came to light yesterday just after local player Flipkart received a whopping $1.4 billion funding from eBay (EBAY - Free Report) , Microsoft Corp. (MSFT - Free Report) and China's Tencent Holdings Ltd.
We note that Amazon’s shares appreciated 45.7% in the last one year compared with the Zacks Internet Commerce industry’s gain of 39.4%. International expansion is expected to back the momentum going ahead.
Frictionless One-click Payment Option
In online payment, the Indian law permits the two-factor authentication system (card details and CVV plus one-time password are sent to registered mobile phones or password on a bank payment gateway). The process is a bit complex and causes payment errors and delay.
The wallet system however offers a smooth payment experience. Money can be added to the wallet following the two-factor authentication system and used for future purchases without repeating the authentication process.
The wallet system allows Amazon not only ensure that money is spent only on it but also to streamline cash back, refunds and incentives payment processes that are used to attract users to Amazon Pay.
In India, Amazon, to date, has powered its gift card wallet business through Qwikcilver’s wallet license, a start-up in which it invested $10 million in 2014. The wallet license along with Amazon Pay may reduce its dependency in Qwikcilver.
Amazon.com, Inc. Revenue (TTM)
Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote
India Expansion Plans in Focus
Amazon’s e-commerce marketplace is currently operational in India and faces tough competition from local players such as Flipkart and Snapdeal. The company looks geared up to take advantage of the ongoing e-commerce boom in India along with growing adoption of smartphones. It has pumped $5 billion in to its Indian operations.
The focus has shifted to India given intensifying competition from Alibaba (BABA - Free Report) and slowing e-commerce growth in China. Recently, Alibaba made an attempt to strengthen its footprint in India by investing $177 million in Paytm E-Commerce. The increasing involvement reflects Amazon’s intent to expand its brand visibility in India.
We believe that if Amazon could repeat its domestic success in India, it will give it an edge over locals as well as global players such as Alibaba and eBay who are increasingly vying for a significant share of this booming market place.
Currently, Amazon has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>