Amazon Backs Indian Startup To Replace Cash With Contactless Payments
Amazon.com Inc. wants to pilot contactless payments to boost the adoption of its payment processing service, Amazon Pay, for offline transactions in India, two people privy to the development told BloombergQuint requesting anonymity.
The Seattle, U.S.-based retailer led an investment of $6.5 million (around Rs 43.7 crore) in digital payments startup ToneTag, infusing nearly Rs 32.3 crore. Mastercard, Manipal Global Education Chairman Mohandas Pai’s investment arm 3one4 Capital and Elevate Innovation Partners also participated in the round, according to filings with the Registrar of Companies that were reviewed by BloombergQuint.
ToneTag, which enables contactless, sound-based transactions on mobile phones, card-swiping machines, automated teller machines and other payment-enabling devices, is integrating its technology with Amazon. Its Chief Executive Officer Kumar Abhishek had told BloombergQuint in March that they’ve enabled 150,000 point of sale machines to receive sound-based payments.
Amazon is pushing its payments service in a crowded market where Google Tez, Walmart-owned Flipkart’s PhonePe and Alibaba and SoftBank-backed Paytm are vying with a host of banks. Even WhatsApp and caller ID app Trucaller have launched payment services. The market, according to Credit Suisse, is expected to grow fivefold to $1 trillion by 2023.
Amazon is looking to roll out contactless payments in the next two-to-three months, one of the persons quoted above said. It may start with offering the service for its Prime subscription members, the person said.
ToneTag and Amazon didn’t respond to emails seeking comment.
By integrating ToneTag, Amazon Pay can be used to make sound-based payments for cash-on-delivery options. Moreover, customers with Amazon Pay wallets will be able to use the sound-based feature at stores that have ToneTag’s retail pod or card-swiping machines. Currently, the startup facilitates on-delivery payments and peer-to-peer transactions and works with over 300,000 merchants, including Fabindia and Shell.