After receiving approval from the Reserve Bank of India in June, Amazon has completed its acquisition of fintech Axio in a deal some have valued at $200 million.
Axio had previously facilitated buy now, pay later services in India for Amazon Pay. The fintech will now be a fully owned subsidiary of the world’s largest e-commerce platform.
Founded 12 years ago, Axio has built its portfolio around digital credit and money management offerings for consumers and small businesses. The firm has served roughly 10 million customers to date, which makes the Axio purchase one of Amazon’s largest deals in India.
A primary objective of the acquisition is to increase financial inclusion in one of the world’s most important markets. Mahendra Nerurkar, Vice President of Payments at Amazon, underscored that only 1 in 6 consumers in India has access to financing at checkout and that “growing access to credit is a fundamental priority for Amazon.”
Enhancing the Reach
The acquisition should enhance the reach of Amazon Pay, which has struggled to gain significant traction in India. According to data from the National Payments Corporation of India, Amazon Pay was the ninth-largest service by volume on India’s Unified Payments Interface.
The Axio purchase should also help the company expand Amazon Pay Later, its BNPL service. Separately, Amazon has also secured approvals from the Reserve Bank of India to issue payment wallets and sell insurance policies on its online marketplace in India.
On the Docket
Amazon’s acquisition is part of retailers’ continued entrenchment in financial services. Last year, Walmart became a majority owner of fintech One, which it later rebranded as OnePay. OnePay has been instrumental in the retailer’s new BNPL and credit card offerings and is likely due for a larger role in Walmart’s financial services strategy.
Additionally, Walmart and Amazon have reportedly considered launching brand-specific stablecoins. Launching a stablecoin could have significant impacts for the retailers because it could save Walmart and Amazon billions in transaction fees while enabling instant and transparent payments.
However, this news caused a stir among many financial services firms. If the two largest retailers in the world launched stablecoins, it could divert billions of dollars from the traditional financial system.
There has been no confirmation of the Walmart or Amazon stablecoin plans, which means brand-specific stablecoins aren’t yet visible on the horizon. However, expanding their financial services scope is clearly in play for many of the world’s leading retailers.
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