Amazon Pay EMI Now Available for Select Mobile Users: Here's How It Works

Amazon India has now announced the availability of a new payment method called Amazon Pay EMI for its mobile users. The cardless mode of payment gives users instant credit, and lets them pay via EMIs using their debit cards, at low interest rates. The company has partnered with Capital Float to let users link their debit cards and pay instalments automatically. On the app, Amazon has highlighted HDFC Bank, ICICI Bank, Canara Bank, Citi Bank, and Kotak Mahindra Bank as eligible banks. With Amazon Pay EMI, users can make payments in instalments - 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 an invite-only program for now, and selected customers have to complete a simple two-step registration process to get an assigned credit limit which they can use to make high value purchases on Amazon marketplace. 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. After completing verification, customers will be instantly provided credit limit of up to Rs. 60,000. This credit can be used for multiple purchases on Amazon, and interest will be charged on instalment facility. The user is then required to link their bank account/ debit card/ or net-banking 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, and customers can track their EMI order history, repayment history and pending dues through Amazon Pay homepage.

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. The e-commerce giant notes that the Amazon Pay EMI invites will be rolled out to more users over the next few days, and as part of the launch offer, Amzon is offering its customers No Cost EMIs on three and six month tenures.

This new Amazon Pay EMI option will enable more credit accessibility to a large base of customers, especially to those who find it difficult to afford high value purchases and go through the hassle of saving up or delaying their purchase. It also 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, net banking, or bank accounts. 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.

“Amazon has always been focused on making shopping truly affordable for masses online. We are on a mission to enable credit access for every Amazon customer. Amazon Pay EMI is a hassle free way of availing instant credit for customers that currently don’t have access to credit. This product has been developed leveraging India Stack to make the process completely digital. After recent expansion of EMI on Debit cards, we are very excited to bring this facility ahead of festive season and being the most affordable destination for our customers,” Vikas Bansal, Director, Emerging Payments, said in a statement.

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.