Amazon Pay India is shifting its strategic focus toward non-metro regions, with over 75 per cent of its customer base now residing outside major cities and demonstrating an increasing demand for digital credit solutions. Speaking on the company’s vision, Vikas Bansal, chief executive officer of Amazon Pay India, outlined plans to expand the platform beyond basic payments into comprehensive credit and insurance services over the next three years. During the recent Great Indian Festival sale, no-cost Equated Monthly Instalment transactions in Tier-III cities grew four times faster than in metro areas, underscoring strong appetite in smaller markets. Overall, EMI spending surged 40 per cent year-on-year, accounting for half of all expenditures on mobile phones, televisions, and large appliances, with no-cost EMI comprising 90 per cent of those EMI spends. To support this growth, Amazon completed its acquisition of fintech firm Axio, formerly Capital Float, for a reported $200 million following regulatory approval from the Reserve Bank of India, consolidating its Buy Now Pay Later offering to lower credit costs and expand distribution across Tier-II, -III, and -IV locations. This aggressive market extension occurs despite Amazon Pay India’s net loss widening by roughly one-third to ₹1,149 crore in FY26. While declining to specify a breakeven timeline or total loan book size, Bansal emphasized that current priorities center on deepening customer adoption, optimizing unit economics, and leveraging a digital-first operational framework to keep overhead costs low. The platform also recorded notable user growth across other products, including a 40 per cent increase in Amazon Pay UPI users and a doubling of Amazon Pay Balance customers. Despite rising transaction volumes, establishing user trust remains a crucial hurdle for digital lending expansion; insights from the How Urban India Pays Report 2026, published jointly with the Pahlé India Foundation, indicate that while consumer trust ratings for payment applications reach 3.98 out of 5, confidence drops to 3.10 when credit services are introduced via the same app. Addressing these concerns, Bansal highlighted the necessity of robust consumer protection mechanisms, clear disclosure of terms, and advanced artificial intelligence tools to tailor financial products while reducing fraud risks. Industry dynamics are also evolving following new directives from the National Payments Corporation of India and the Ministry of Finance, which instituted a 0.4 per cent merchant discount rate on eligible person-to-merchant UPI transactions above ₹2,000 to encourage sustained technology investment. Drawing on his previous experience at major financial institutions like Visa and American Express, Bansal stressed that the sheer scale of unmet demand for digital credit and low single-digit insurance penetration in India presents a massive long-term opportunity for financial inclusion.
No-Cost EMI and UPI Spreads Prompt Amazon Pay to Expand Financial Services Access
