Amazon, Flipkart Challenge Indian Banks with Pay-Later and Consumer Loan Rollout

TLDRs;

• Amazon and Flipkart expand into lending, offering pay-later and consumer loans that increasingly compete with India’s traditional banks.
• Amazon leverages Axio to scale BNPL, personal loans, and new SME credit products across its digital ecosystem.
• Flipkart awaits RBI approval for its new lending arm, aiming to offer no-cost EMIs and high-interest consumer durable loans.
• India’s regulators tighten oversight of digital credit, shaping how big techs enter the country’s booming lending market.

Amazon and Flipkart are accelerating their push into India’s consumer lending market, unveiling new pay-later products and personal loan offerings that place them in direct competition with traditional banks.

As digital credit demand surges across India’s rapidly expanding e-commerce economy, both giants are positioning financial services as the next frontier of growth.

The moves come as India’s fintech landscape undergoes a structural shift, with big tech platforms increasingly taking on roles once dominated by banks and non-banking financial companies (NBFCs). Their scale, user data, and seamless user interfaces give them a strategic edge, but also draw heightened scrutiny from the Reserve Bank of India (RBI).

Big Tech Targets Consumer Credit

Amazon and Flipkart already rank among the top 10 platforms for transactions on India’s Unified Payments Interface (UPI), a milestone that has enabled them to build trust with millions of users.

This large payments footprint is now becoming a launchpad for offering credit products at scale.

The demand for digital loans,especially buy now, pay later (BNPL), has exploded over the past five years. The RBI estimates that annual digital lending disbursements could exceed US$350 billion by the late 2020s, creating a massive opportunity for platform-led credit models. Amazon and Flipkart are now racing to capture this demand before traditional lenders tighten their hold.

Amazon Deepens Financial Push

Amazon’s expansion into lending gained momentum after its acquisition of Axio, a Bengaluru-based NBFC known for BNPL and personal loan products. The acquisition gives Amazon a licensed entry point into regulated lending, enabling it to issue loans directly and offer new financial tools alongside its marketplace.

With Axio integrated into Amazon Pay, the company has rolled out personal loans, BNPL options, and, more recently, fixed deposit offerings through partner banks. Amazon is also preparing to launch small-business loans and cash management services aimed at sellers on its platform. These products could unlock new monetization streams while reducing credit frictions for merchants who rely on Amazon for daily operations.

However, deeper involvement in SME lending requires additional regulatory approvals. The RBI’s tighter digital lending framework demands stricter disclosures, capital buffers, and clearer fee structures to prevent opaque pricing or predatory practices.

Flipkart Awaits Final Clearance

Walmart-owned Flipkart is following a similar trajectory but is currently in the final stages of receiving regulatory clearance. Its new entity, Flipkart Finance, is awaiting RBI approval to begin issuing loans and expanding its pay-later program.

Once operational, Flipkart Finance plans to offer no-cost EMI options for online shoppers and consumer durable loans with interest rates ranging between 18% and 26% annually, according to company filings. These products would integrate directly into the checkout experience, giving Flipkart more control over credit decisions and reducing dependencies on third-party lenders.

In March 2025, Flipkart became the first major e-commerce platform to secure an NBFC lending license, a key milestone that allows it to issue credit but not accept deposits. This restriction means Flipkart must rely on wholesale borrowing or cash infusions from Walmart to fund its loan book.

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