Amazon Pay India’s losses grew by 33% to ₹1,149 crore in FY26, as revenue climbed 18% to ₹2,484 crore. The company is struggling to match the scale of major UPI players and is now shifting focus toward lending and credit products to improve margins.
Amazon Pay India has reported a widening loss for the financial year 2026, highlighting the continued struggle for profitability in the country's crowded digital payments sector. According to regulatory filings, the company’s net loss rose to ₹1,149 crore, up 33% from the ₹866 crore reported in the previous fiscal year. While revenue increased by 18% to reach ₹2,484 crore, the gap between rising operational costs and income remains a challenge for the firm.
The digital payments space in India is dominated by players like PhonePe and Google Pay, which command a large share of UPI transactions. Because payment processing alone offers thin margins, Amazon Pay is now attempting a strategic shift. The company is increasingly focusing on financial services, such as digital lending and credit products, rather than relying solely on payment volume.
A central part of this strategy is the company's focus on its 'Buy Now, Pay Later' (BNPL) offerings. To strengthen its capabilities in this area, Amazon Pay has been working on integrating the lending platform Axio. This move is designed to help the company offer more credit-based financial products, which generally provide better profit margins than standard payment processing. Additionally, the company’s co-branded credit card partnership with ICICI Bank continues to be a pillar of its strategy, with over 5 million active users currently using the card.
Despite these efforts, the company faces a significant revenue gap compared to its primary competitors, with players like PhonePe and Paytm reporting much higher annual revenues. Investors should watch how effectively the company can convert its large e-commerce user base into users of these higher-margin financial products. The ability to control rising operational costs while trying to scale its credit business will be a critical factor for the company's long-term financial health. As Amazon Pay is a subsidiary of the US-based Amazon Inc., its performance in India is also linked to the global parent's capital allocation strategy for the country. The next important updates for the firm will be its progress in loan book growth and whether these credit initiatives can successfully bridge the gap in profitability.