7 months ago
Amazon Pay Tests Fixed Deposits Amid Softening Demand
Amazon Pay has started offering fixed deposits on its app, joining a few other platforms.
Fixed deposits are a way to save money in a bank account that pays a fixed interest rate.
However, not many people are using these digital fixed deposits.
The main reason is that people mostly use apps like Amazon Pay for quick transactions, not for investing.
Also, the interest rates have gone down, and there are some extra steps to sign up, which makes it harder for people to use this service.
Some other platforms have even stopped offering fixed deposits because not enough people are using them.
Amazon Pay has launched fixed deposits on its app, joining a small group of digital platforms.
Digital FD volumes have declined 20-40% on-year due to lower interest rates and reduced user intent.
Online FD marketplaces sell deposits worth about Rs 10,000 crore annually, a small fraction of the total market.
Friction in onboarding, such as fresh KYC requirements, has hurt conversion rates.
The yield premium of 50-100 basis points over traditional bank FDs has not been enough to attract users.
- Who
- Amazon Pay, Google Pay, Stable Money, Wint Wealth, Grip Invest, Sagar Agarvwal, Beams Fintech Fund
- What
- Launch of fixed deposits on Amazon Pay app
- Where
- India
- When
- Recent, with Google Pay exiting in 2021
- Why
- To diversify investment options and attract users, despite softening demand
Key facts
- Platform
- Amazon Pay
- Product
- Fixed Deposits
- Annual Online FD Sales
- Rs 10,000 crore
- Interest Rates
- Up to 8%
- Minimum Ticket Size
- Rs 1,000
- Demand Decline
- 20-40% on-year
- Yield Premium
- 50-100 basis points
- KYC Requirement
- Fresh KYC for each deposit
Quotes
Another executive
An industry executive
“FD volumes were high earlier when rates were elevated. Now, with banks offering lower rates, flows have shrunk significantly.”
financialexpress.com
“We hear volumes have come down across platforms, and some players are completely shutting FD offerings due to low traction.”
financialexpress.com
Sagar Agarvwal
Founder & managing partner, Beams Fintech Fund
“If an app is focusing on investment solutions, then the consumer also comes there with the mindset of putting money to work. But if the app is positioned as UPI-first, investment becomes secondary.”
financialexpress.com
