Amazon Pay India Reports FY26 Financial Challenges
Amazon Pay India, the digital payments division of Amazon, has encountered profitability hurdle in FY26, with its losses increasing by 33% despite a revival in revenue growth following a downturn in FY25. The firm has also experienced growing competition in the UPI landscape, as emerging players have gained traction, leading to a decline in its market share.
Revenue Growth in Fiscal Year 2026
Amazon Pay India’s operational revenue surged by 18.5% year-on-year, reaching Rs 2,484.4 crore in the fiscal year ending March 2026, up from Rs 2,096.6 crore in FY25, as revealed by its standalone financial documents submitted to the Registrar of Companies (RoC). The platform allows users to make payments for purchases on Amazon and various services such as utility bills, mobile top-ups, flight bookings, and peer-to-peer UPI transfers.
The offerings extend to digital wallets, insurance, and credit solutions. The major sources of revenue come from payment processing fees and commissions. Additionally, Amazon Pay recorded Rs 108.2 crore from non-operational activities like interest from current investments, leading to a total income of Rs 2,592.6 crore for FY26, compared to Rs 2,195.1 crore in the previous year.
Expenditure Analysis
On the expenditure side, advertising and promotional costs accounted for the largest segment of expenses, escalating by 11% to Rs 1,767.6 crore in FY26. This expenditure included cashbacks, customer incentives, payments to banks for RuPay cards, as well as advertising and promotional campaigns, B2B initiatives, and sponsorships.
Payment processing fees soared by 35% to Rs 1,140.6 crore, while employee benefit costs were up by 5% to Rs 224.9 crore, which comprised Rs 55 crore incurred from employee stock ownership plans (ESOPs). Communication expenses rose by 30% to Rs 193.2 crore, with legal and professional fees standing at Rs 171.2 crore. The company faced additional overheads of Rs 243.6 crore, incorporating sales commissions and varied expenses during the fiscal year.
Financial Summary and Market Position
Overall, Amazon Pay’s total expenses escalated by 22% to Rs 3,741.1 crore in FY26 from Rs 3,060.8 crore in FY25. This increase in costs, particularly in payment processing and marketing, outstripped revenue growth, leading to a 33% rise in net losses, amounting to Rs 1,148.5 crore in FY26 compared to Rs 865.7 crore in FY25. The firm’s EBITDA loss also increased to Rs 1,227.4 crore from Rs 952.1 crore, reflecting a negative EBITDA margin of 49.4%. The company’s return on capital employed (ROCE) was recorded at -53.7%. On a unit basis, Amazon Pay expended Rs 1.53 to generate each rupee of operating income during this fiscal year.
Despite being part of Amazon’s extensive e-commerce network, Amazon Pay has faced difficulty in retaining its foothold in India’s burgeoning UPI sector, particularly in light of increasing competition from new entrants like Navi and Flipkart-backed super.money, as well as CRED.
According to data from the National Payments Corporation of India (NPCI), Amazon Pay processed 95.93 million UPI transactions in August 2026, representing a mere 0.39% of the overall transaction volume. PhonePe and Google Pay have continued to hold a significant portion of the market with approximately 78% combined share, while newer competitors have steadily augmented their footprint.
The FY26 results for Amazon Pay highlight the challenges associated with scaling without more robust payment economics. The business remains reliant on incentives and marketing to maintain its payment operations, while the rising processing costs impose additional stress. This active equation reveals that greater transaction volumes do not inherently guarantee improved profitability when the expenses tied to acquiring and processing payments remain high. Although its integration within Amazon’s comprehensive ecosystem offers extensive reach, the challenge lies in transitioning that reach into a viable payments business.