Amazon announced in February they would be acquiring Emvantage, an online payment gateway that processes alternative and card-based payments in India, for an undisclosed sum. The privately held startup offers a platform and technology that Amazon will leverage to develop and build out their Indian eCommerce site and payment platform.
China recently surpassed the United States as the largest eCommerce market, but eCommerce in India is growing rapidly as well. Morgan Stanley predicts India’s eCommerce market will grow to $137 billion by 2020, representing incredible growth opportunities for major eCommerce players like Flipkart, Snapdeal and Amazon.IN.
The acquisition of Emvantage benefits Amazon by providing local payment methods and expertise in a market that has lower credit and debit card penetration and more preference towards cash-funded and alternative payment methods. Many Indian eCommerce shoppers use e-wallets with prepaid balances they can top up at retail locations with cash, such as Paytm, Klickpay and FX Mart. When competing for sales in this multi-billion dollar eCommerce market appealing to the local payment preferences is critical.
Amazon stated in their press release announcing the acquisition that Emvantage employees will join their payments team to focus on payment solutions and products specifically for India. The release also stated the acquisition would accelerate Amazon’s development of solutions for the Indian eCommerce industry. Srinivas Rao, Director Amazon Payments India, added that they are “laser focused on providing customers in India with a convenient and trustworthy shopping experience.”
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