Digital payments are fast changing the way we transact at the point of sale for any goods or services. UPI’s operational ease has become addictive for the average Indian smartphone user. In this scenario, Amazon Pay provides a gateway to the global shopping arena of Amazon.com. 

This online payment processing service has dovetailed everyday expenses with new technological avenues to transact faster and safer than before. Nirav Kamdar, Director & Chief Technology Officer, Amazon Pay, describes how operating at the bleeding edge of technology has refined Amazon Pay to offer multi-domain solutions.

Latest Innovations

Artificial intelligence and machine learning take up the lion’s share of Amazon Pay’s operations in understanding user behavior and delivering the right experience. For instance, AI-ML is used for their credit solution. “In India, a lot of customers don’t have a rich credit history. This restricts them from availing loans. We use ML algorithms to determine their credit worthiness and extend credit lines accordingly,” Kamdar explained. For merchants, this is a boon as Amazon Pay provides loans at one of the lowest rates in the industry. 

UPI has only become better with Amazon Pay’s UPI mapper that was launched in 2022. The mapper enables users to link their phone numbers to their UPI accounts. That way, customers can send and receive money with just the phone number, regardless of the different apps the parties in the transaction are using. One can also send and receive money within Amazon Pay using this feature.

Then there is Amazon Pay Balance, a facility which enables one to send and receive money from other UPI-enabled wallets or bank account. It is completely interoperable on the UPI rails and can be recharged with a debit card issued in India. Offering regular facilities of scan and pay, just like Amazon Pay’s own stack of services, it however, empowers the digital transaction system further inside the Amazon ecosystem by allowing money flow from other banks. 

Incidentally, Amazon Pay was one of the first to dole out this service in India and it simplifies transaction, money management and cashbacks through two channels inside Amazon Pay Balance – ‘Money’ and ‘Gifts & Credits’. Amazon Pay Balance has nearly 40 million registered users now.

The Amazon Web Services (AWS) ecosystem has also received a suitable upgrade in tech infrastructure with Amazon Pay’s secure cloud banking services. “This is for existing banking customers using legacy architecture inside AWS,” he added. Additionally, the Amazon vertical has enriched their rewards experience, through which a user can see the total number of rewards won and total earnings collected.

With video KYCs helping customers to finish their formalities seamlessly, better in-app loan repayment and faster auto-renewal of policy insurance, Amazon Pay is reducing the burden of customer intervention and boosting user satisfaction significantly.

En Route Voice-enabled Transactions

As an industry leader, Amazon Pay is constantly nurturing the complex natural language processing systems to make voice the leading interface for transaction through AI. Alexa, the virtual assistant technology, can now operate on hands-free devices such as Echo Smart Devices and also on smartphones in the absence of such devices.

“Customers can now pay their utility bills across multiple categories, such as electricity, water, mobile bills, broadband, and DTH, among others through Alexa by simple voice commands. In the background, if you are an existing Amazon Pay user, then Alexa will retrieve the amount of bill due for you. It will ask for confirmation and to process the payment,” Kamdar said, adding that with Alexa operating on smartphones, one can now use voice commands to direct Alexa on phone for any sort of payment. 

Securing Payments while Matching Buyer Intent 

As operational ease increases risks of frauds, the added feature of a user enabling voice pins to secure transactions on Alexa has also been added. AI-ML use has become fundamental in detecting potential fraudulent transactions, believes the CTO. “For every transaction and sign-in, we run ML algorithms that track these activities across 3000+ risk variables. Thus, it determines the risk associated with a particular transaction. If the risk is high, we throw in a second factor of authentication to the customer or manually investigate at the back end,” Kamdar explained. 

Intuitive AI-ML algorithms can even surprise users and Amazon Pay has already witnessed such experiences where machine learning helped generate notifications about the exact product a user was looking on the screen. While digital payment can be very convenient and rewarding, customers will only use if they feel absolutely safe. Besides the state-of-the-art tech arsenal of Amazon Pay, the brand also organizes customer education programs to educate users about risk of payment fraud. 

“As we create more secure systems, customer convenience often gets compromised, since we increase the number of barriers a user has to go through to authenticate a safe transaction. At Amazon Pay, we also fulfill the duty to strike a balance with a pleasing experience,” Kamdar maintained.

Smart Stores Break Fourth Dimension of Physical Retail

Started in 2020, Amazon Pay integrated thousands of small and medium merchants into the mission to make offline retail as interesting as e-tail. Now, an Amazon Pay user can spot the nearest Amazon Smart Store, which could be any regular grocery store. The advantage is that the customer can reach the store and scan its complete product catalog on the phone. 

“This helps the merchants as customers arrive at purchase decisions way sooner. It’s a win-win situation for the customers who can scan the QR code of a particular product they see and are interested to take it forward. This leads them to all the reviews by customers on Amazon.com, which influences the customer at the shop to purchase wisely. That’s shopping made simpler and more fun,” said Kamdar. 

Pre-pandemic to Post-pandemic Growth

All fin-tech entities have seen phenomenal growth and adoption during the pandemic, just like Amazon Pay, which strives to deepen digital payment habits across India, over indulgent as well as daily necessary shopping. Investing hugely since 2019, Amazon Pay UPI has over 60 million sign ups today. 

“In the last one year, we saw 75 percent of UPI customers coming from Tier II and III cities, besides the already high business volumes from Tier I cities. On the merchant front, we have empowered over 85 lakh offline small business owners and entrepreneurs with digital payment infrastructure across 350 cities and towns in India. The Smart Store program has touched more than 17,000 neighborhood shops with contactless, hybrid shopping experience,” Kamdar shared.

Amazon Pay Later, the ‘Buy Now Pay Later’ platform, has recorded 10 million transactions with 99.9% payment success rate. This apart, there is an Amazon Pay for Business mobile app that enables merchants to accept digital payments. Voice notification is becoming more and more ubiquitous with merchants now, who now have the option to choose notifications between English and Hindi inside the app. Another interesting shopping trend is with Amazon Gift Card products offering customers more than 17 crore products across 10,000+ merchants to choose from. Millions of customers use Amazon Gift Cards every month. 

Way Forward

With the RBI rolling out the digital rupee, Amazon Pay is on board to step forward and make digital transaction more interesting. As Kamdar says, the brand works backwards by understanding the needs of the consumer first and then curating tech to serve the specific purpose. On that note, the brand is hopeful that its initiatives will bring global tech and learnings to help small and medium businesses that form the backbone of Indian economy.