A new banner ad on the Amazon India mobile app announces the availability of a new payment method called Amazon Pay EMI. It gives users instant credit, and lets them pay via EMIs using their debit cards. The company has partnered with Capital Float to let users link their debit cards to pay EMIs automatically. Eligible banks include HDFC Bank, ICICI Bank, Canara Bank, Citi Bank, and Kotak Mahindra Bank. Users can make payments over EMIs ranging from up to 3 months to 12 months. This comes after Amazon expanded availability of debit card EMIs to ICICI and Axis Bank users last week, after making it available for HDFC Bank users earlier this year.
Amazon Pay EMI is pre-approved for some users, and some have to wait for an invitation to use it. To register for Amazon Pay EMI, the user needs to verify their identity using PAN and Aadhaar card details. Verification needs to be completed by confirming an OTP sent on the Aadhaar-linked mobile number. The credit limit is then calculated by the lending partner, and displayed to the user. This credit can be used for multiple purchases on Amazon. The user is then required to link their debit card for auto repayment in EMIs that will be ascertained, based on the product in question. In its terms and conditions, Amazon noted that the Amazon Pay EMI can be availed only for single item purchases with a minimum purchase value of Rs. 8,000. The Amazon Pay EMI will not be available when exchange offer is applied on purchase, and the linked account needs to have a sufficient amount that covers the cost of purchase. For Amazon Pay EMI to work, users must ensure that the Amazon Pay balance should be unchecked on the payment selection page. The Amazon Pay EMI option is currently available only for mobile users.
Once registered, users can avail this option on checkout of products worth more than Rs. 8,000, and less than the prescribed limit. The limit is ascertained on the basis of information already available with Amazon, users’ credit bureau history, and more. Amazon notes that the lending partner decides the credit limit, and not the e-commerce giant. Furthermore, jewellery, gift card, Amazon Pay balance top-up, or products from Amazon Global Store cannot be purchased using Amazon Pay EMI.
This new Amazon Pay EMI option will enable more credit accessibility to a large base of customers. It enables the budget-conscious consumer to buy premium-priced goods by not paying the full amount up front, and paying in instalments instead, by using their debit cards. According to the Reserve Bank of India (reported by Medianama), the number of debit cards increased to 846.7 million by January 2018, with 4.23 million new cardholders in 2017. In comparison, a total of 36.24 million credit cards were in operation, with the addition of 0.7 million cards. Thereby, with Amazon Pay EMI, Amazon looks to cater to this larger user-set who prefer not to use their credit cards.
Flipkart was also recently spotted listing new modes of payment called Flipkart Finance and Flipkart Finance EMI. These options are likely to offer a similar service like Amazon Pay EMI, but this is pure speculation at this point. In a bid to introduce more innovative credit options, Flipkart also launched the ‘Flipkart Pay Later’ option earlier this year that allows users to buy the device and pay after a month. The limit on purchase through this option is between Rs. 5,000 and Rs. 10,000.