The Reserve Bank of India (RBI) has fined Amazon Pay, the company’s payment division, INR 3.07 crore for failing to abide by the KYC (Know Your Customer) Direction and the Master Directions on Prepaid Payment Instruments (PPIs). The RBI asked Amazon Pay to explain why it shouldn’t be fined for not following its instructions. When Amazon Pay didn’t respond, the penalty was put in place. The central bank decided that the accusations of not following the rules were true and asked for a fine to be put in place. PPIs are tools that make it easier to pay for goods and services, conduct financial transactions, and enable remittance services, among other things, using the value they store.
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The RBI could charge the fine because Section 30 of the Payment and Settlement Systems Act of 2007 gave it that power. In the Indian digital payments market, Amazon Pay UPI faces competition from services like PhonePe, Google Pay, Mobikwik, and Paytm, among others. The top three UPI providers in India in 2022 were PhonePe, Google Pay, and Paytm. However, Amazon Pay processed transactions worth INR 73.45 billion out of the 12.82 lakh crore in transactions. That were processed that year. Despite the regulatory issues, Amazon recently stated that the company is on the right track in the market. Even though it will take time for India to become profitable. Also, Amazon said last month that it would add the Open Network for Digital Commerce (ONDC). To its Smart Commerce services and logistics network. This is not Amazon’s first regulatory issue in India.
The Indian Competition Commission (CCI) is looking into the e-commerce behemoth for bias against some platform sellers. The competition watchdog went after the top two sellers on Amazon India last year. Cloudtail and Appario, because they may have broken the law. Additionally, the Drug Controller General of India (DCGI) issued show cause notices to 20 online pharmacies. Including Amazon Pharmacy, for selling and distributing drugs in violation of the 1940 Drugs and Cosmetics Act. The RBI also granted Amazon Pay in-principle approval to function as an online payment aggregator.
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Amazon Pay also has other services, such as Amazon Pay Later and Amazon Pay for Businesses. As a result of Amazon Pay’s failure to follow some of the Master Directions on PPIs and KYC directions. The RBI has fined the company INR 3.07 crore. Amazon has had trouble with the law in India before. The Competition Commission of India (CCI) investigated and raided the company for allegedly breaking the country’s competition laws. Still, Amazon is committed to following the law and keeping a high standard of compliance. It has in-principle approval to function as an online payment aggregator. And is on the right track in the Indian market.
