The Reserve Bank of India (RBI) has fined e-commerce giant Amazon’s payment arm, Amazon Pay, INR 3.07 Cr for violating prepaid payment instruments (PPIs) norms and know your customer (KYC) guidelines.
“The Reserve Bank of India (RBI) has imposed a monetary penalty of 3,06,66,000/ on Amazon Pay (India) Private Limited (the entity) for non-compliance with certain provisions of the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016,” the central bank said in a statement.
The RBI stated that it issued a show cause notice to Amazon Pay, asking why a penalty should not be imposed for failing to follow its instructions. After reviewing the entity’s response, the central bank stated that it concluded that the charges of noncompliance were substantiated and that a monetary penalty was warranted.
PPIs are instruments that facilitate the purchase of goods and services, the conduct of financial services, and the provision of remittance facilities, among other things, in exchange for the value stored in them. The penalty was imposed by the RBI in accordance with Section 30 of the Payment and Settlement Systems Act of 2007.
In the Indian digital payments market, Amazon Pay UPI competes with PhonePe, Google Pay, Mobikwik, and Paytm, among others. While PhonePe, Google Pay, and Paytm held the largest share of the UPI market in India in 2022, Amazon Pay processed transactions worth INR 73.45 Cr out of the INR 12.82 Lakh Cr processed during the year. Amazon Pay recently received in-principle approval from the RBI to operate as an online payment aggregator.
Amazon Pay also provides other services such as Amazon Pay Later and Amazon Pay for Businesses.
The latest development adds to Amazon’s regulatory woes in India. The Competition Commission of India (CCI) is investigating the ecommerce giant for allegedly favouring certain sellers on its platform. Amazon India’s two top sellers, Cloudtail and Appario, were raided by the competition watchdog last year for alleged violations of competition laws.
In India, it shut down several verticals, including edtech and food delivery, last year. Furthermore, Amazon Pharmacy was one of 20 epharmacies served with show cause notices by the Drug Controller General of India (DCGI) for selling and distributing drugs in violation of the Drugs and Cosmetics Act, 1940.
Amazon is one of the world’s largest e-commerce platforms, offering a vast range of products and services to customers worldwide. Founded in 1994 as an online bookstore, Amazon has since expanded to offer a diverse range of products, including electronics, clothing, home goods, and groceries, among others. The platform has become a household name for consumers due to its convenience, competitive pricing, and speedy delivery options.
Amazon’s success can be attributed to its user-friendly interface, which allows customers to search for products quickly and easily, make purchases securely, and track their orders. Additionally, Amazon’s marketplace model has enabled it to offer a vast selection of products from third-party sellers, increasing the platform’s variety and reach.
Furthermore, Amazon has established itself as a leader in customer service, with an easy return policy and responsive support team. It has also implemented several innovative features, such as personalized recommendations, one-click purchasing, and Amazon Prime, which offers exclusive benefits to subscribers.
Overall, Amazon’s combination of convenience, affordability, selection, and excellent customer service has made it a go-to e-commerce platform for millions of consumers worldwide.