Amazon India has received approval from the Reserve Bank (RBI) to operate a prepaid instrument or digital wallet.
Amazon Online Distribution Services (AODS), a subsidiary of Amazon Asia Pacific Resources, was awarded the license on March 22.
The license is valid till the end of fiscal year 2022.
The development comes at a time when the digital payments space is witnessing a high level of engagement by leading internet-based startups in the country.
Amazon invested INR 150 crore in AODS last year with the objective of participating in this space. The Seattle-based e-commerce major had applied for a wallet license.
Amazon's top rival, Flipkart, also has ambitious plans for its payments business under the PhonePe brand.
The RBI approval for Amazon sets the stage for a fierce competition between the company and Flipkart in the payments business too.
At present, Alibaba-backed Paytm is the largest wallet player in India. Other smaller players include Mobikwik and Freecharge.
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