Why Amazon Pay Is Facing Losses In India Despite Massive Double-Digit Revenue Growth?

Revenue is going up. The customer base is still large. Amazon Pay is available across shopping, UPI, bills, recharges, and other financial services. Yet the business is losing more money than it did a year ago.

That is the puzzle behind Amazon Pay India’s FY26 numbers…

The company’s operating revenue rose 18.5% to ₹2,484.4 crore in FY26 from ₹2,096.6 crore in FY25. But its net loss widened 33% to ₹1,148.5 crore. The reason is fairly simple once the costs are broken down: Amazon Pay’s expenses grew faster than its revenue.

Amazon Pay Revenue Is Growing, So Why Are Losses Rising?

The FY26 numbers show the gap clearly.

These are standalone financials for Amazon Pay India Private Limited. The company had reduced its loss in FY25, but FY26 reversed that trend.

The important point is that revenue growth and profit growth are not the same thing. Amazon Pay generated roughly ₹388 crore more operating revenue in FY26, but its expenses increased by about ₹680 crore.

So where did the money go?

Where Is Amazon Pay Spending The Money?

Look, two expense categories stand out.

Advertising and sales-promotion expenses increased 11% to ₹1,767.6 crore. This includes customer incentives, cashback-related spending, payments to banks for RuPay cards, advertising, publicity, B2B activities, and sponsorships.

Then there are payment processor fees. These jumped 35% to ₹1,140.6 crore, almost twice the rate at which operating revenue grew.

Together, these two expenses accounted for nearly four-fifths of Amazon Pay India’s total expenses.

This explains why simply getting more people to use the platform does not automatically make it profitable.

A payments company can process more transactions while still losing money if it has to spend heavily on incentives to acquire and retain customers and pay substantial fees to process those transactions.

Employee expenses, meanwhile, increased more moderately to ₹224.9 crore. Communication expenses also rose, reaching ₹193.2 crore.

Payment Processing Costs Are Eating Into Revenue

There is a basic economics problem here.

Suppose a payment platform earns a small amount from processing a transaction. That revenue has to cover the cost of moving the money, maintaining the technology, acquiring the customer and, in some cases, offering incentives.

If those costs rise faster than the money earned from the transaction, higher payment activity alone will not fix the problem.

That is what makes the 35% rise in processor fees particularly important. The expense increased much faster than Amazon Pay’s 18.5% revenue growth.

The reported figures also imply that Amazon Pay spent about ₹1.53 for every ₹1 of operating revenue on the cost basis cited in industry reporting. The precise ratio depends on which expense definition is used, so it should not be interpreted as a per-transaction cost.

Amazon Pay Faces A Tough UPI Market

Amazon has a huge advantage in consumer reach, but UPI is a different battlefield.

NPCI’s August 2026 data shows that UPI processed 24,508.96 million transactions that month. Amazon Pay accounted for about 95.93 million transactions, or roughly 0.39% of the total volume. PhonePe and Google Pay together accounted for 78.3%.

That does not mean Amazon Pay has no role in digital payments. It means its share of India’s UPI transaction volume remains small compared with the two largest apps.

And that matters because UPI is a scale business. A player with a smaller transaction base has less opportunity to spread fixed technology and operating costs across a large volume of payments.

Amazon Pay also competes for customer attention with Paytm, Navi, super.money, CRED and other UPI apps.

Amazon’s Ecosystem Is Still A Major Advantage

This is where the Amazon Pay story becomes more interesting.

Amazon Pay is not just a UPI app. It sits inside a much larger consumer ecosystem.

Customers can use it for Amazon purchases, bill payments, mobile recharges, travel bookings and payments on partner platforms. Amazon also offers Amazon Pay Balance, gift cards, UPI and credit products. Amazon Pay India has also held an online payment aggregator licence since 2024, allowing it to process and settle payments for online merchants beyond Amazon’s own marketplace.

That creates multiple opportunities to bring a customer into one service and then introduce other products.

The problem is that ecosystem reach does not automatically equal payment profitability.

A customer may use Amazon Pay to buy something on Amazon, collect an Amazon Pay voucher, use an Amazon Pay gift card, pay a bill or make a UPI payment. Each activity can strengthen the ecosystem, but the financial economics of each service can be different.

What Is Amazon Pay Balance And How Does It Work?

Amazon Pay Balance is essentially the pool of funds associated with Amazon Pay Wallet and gift-card credits. Amazon says users can use it for Amazon purchases, bills, recharges and payments on thousands of partner apps and websites.

For eligible full-KYC wallet users, Amazon says the balance can also be transferred to a bank account through the Amazon Pay Wallet UPI handle. That means the answer to searches such as “Can I transfer Amazon Pay balance to bank account?” is yes, but eligibility and the type of balance matter.

The same distinction matters for questions such as how to withdraw Amazon Pay balance, how to use Amazon Pay balance for UPI and where Amazon Pay balance can be used.

Users can check their balance from the Amazon Pay section of the app. Amazon also says full-KYC wallet users can use the wallet for Scan & Pay.

Gift-card balances have different rules. Amazon’s published terms say Amazon Pay gift cards can be redeemed into Amazon Pay Balance, while gift cards and unused gift-card balance generally expire one year from issuance and cannot be redeemed for cash.

So, Amazon Pay Balance, Amazon Pay Wallet and Amazon Pay Gift Cards should not be treated as identical products.

How Does Amazon Pay Later Work?

Amazon Pay Later adds a credit layer to the ecosystem. It allows eligible customers to use a credit facility at checkout, subject to the terms and eligibility determined by the lending partner.

The product remains active in the Amazon ecosystem. Amazon’s August 2026 promotional material, for example, referred to Amazon Pay Later credit upgrades and three interest-free EMIs for eligible customers.

Axio is particularly relevant here. Amazon completed its acquisition of Axio in 2025, and Axio continues to operate as a separate subsidiary. Its financials are therefore not part of Amazon Pay India’s standalone FY26 results.

This distinction matters when assessing Amazon’s broader financial-services strategy.

For consumers searching how to close Amazon Pay Later, how to cancel Amazon Pay Later, how to deactivate Amazon Pay Later or how to increase the Amazon Pay Later limit, the exact process and eligibility can depend on the account and lender. Those instructions should therefore be checked against the current Amazon/Axio account interface rather than copied from older guides.

Amazon Pay ICICI Credit Card: Another Part Of The Ecosystem

The Amazon Pay ICICI credit card is another example of how Amazon extends its payments ecosystem beyond UPI.

ICICI Bank is the issuing bank, while the card is co-branded with Amazon. The current ICICI Bank information says the card has no joining or annual fee and offers up to 5% back for eligible Amazon purchases by Prime members, 2% back on eligible Amazon Pay merchant transactions and 1% on other eligible payments. Rewards are credited as Amazon Pay Balance.

That makes the ICICI Amazon Pay Credit Card more than just another payment option. It can keep customers spending within the wider Amazon ecosystem.

For people searching how to apply for Amazon Pay ICICI credit card, ICICI Bank provides the application route and eligibility information. The bank’s current card material does not list airport lounge access among the core benefits, so claims about Amazon Pay ICICI credit card lounge access should not be copied from generic credit-card lists.

Gift Cards, Vouchers And Other Amazon Pay Features

Amazon Pay also connects shopping with payments through products such as an Amazon Pay gift card and Amazon Pay voucher.

A gift card can be redeemed into the customer’s Amazon Pay Balance, while some shopping vouchers have separate terms and restrictions. Amazon’s current published material confirms that gift-card value can be added to Amazon Pay Balance, but redemption and expiry rules depend on the product’s terms.

Other consumer touchpoints include Amazon Pay login, bill payments, rewards and promotional activities such as the Amazon Pay quiz.

For customer support, users should use Amazon’s official customer-service route rather than relying on websites claiming to provide an Amazon Pay customer care number or an Amazon Pay customer care number India toll free. Amazon’s official contact page is the safer reference point for account-specific support.

So, Why Is Amazon Pay Still Making Losses?

The FY26 numbers point to four connected reasons.

The biggest issue is the gap between revenue growth and cost growth. Advertising and promotions remain substantial because payment platforms compete for usage, while processing fees directly increase the cost of handling transactions.

At the same time, Amazon Pay’s UPI share remains small despite its access to Amazon’s enormous shopping ecosystem.

That leaves the business with a difficult equation: grow payment activity, spend to encourage that activity, pay to process it, and then try to generate enough revenue per transaction to cover those costs.

What The Numbers Really Tell Us?

Amazon Pay’s FY26 results do not show a business that has stopped growing. They show a business where growth has not yet translated into stronger payment economics.

Operating revenue increased by nearly one-fifth, but expenses grew faster and the net loss expanded by roughly one-third. The pressure is particularly visible in payment processing and promotional spending.

The broader Amazon ecosystem remains valuable because it gives the company several ways to engage the same customer: shopping, UPI, Amazon Pay Balance, credit cards, gift cards and credit products.

But those advantages only become financially meaningful if the revenue generated from that ecosystem eventually grows faster than the cost of serving it.

FAQs

How To Use Amazon Pay Balance?
You can use eligible Amazon Pay Balance for Amazon purchases, bills, recharges and payments at participating merchants and partner platforms. Full-KYC wallet users may also have additional UPI functionality.

Can I Transfer Amazon Pay Balance To A Bank Account?
Yes, Amazon says full-KYC Amazon Pay Wallet users who register the wallet’s UPI handle can transfer eligible wallet balance to a bank account through UPI.

How Does Amazon Pay Later Work?
Amazon Pay Later provides eligible customers with a credit facility for purchases, subject to eligibility and lending terms. Axio is the lending entity associated with the product.

How To Apply For Amazon Pay ICICI Credit Card?
Applications are handled through ICICI Bank, which is the issuing bank. Current eligibility and application details are available on the bank’s official card page.

Where Can I Use Amazon Pay Balance?
Amazon says the balance can be used on Amazon.in, for eligible bills and recharges, and on participating third-party apps and websites.

What Is An Amazon Pay Gift Card?
It is a prepaid gift product that can be redeemed into the recipient’s Amazon Pay Balance. Gift-card terms include expiry and redemption restrictions.

Does Amazon Pay Balance Expire?
There is an important distinction between wallet funds and gift-card value. Amazon’s gift-card terms state that gift cards, including unused Amazon Pay balance originating from them, expire one year from issuance.

Note: We have also covered- “Amazon vs Flipkart – Who Is Leading The Indian E-Commerce?” Go through the article for more details. 

Conclusion

Amazon Pay’s problem in FY26 was not a lack of revenue growth. The business grew its operating revenue by 18.5%, but its costs grew faster, particularly payment processing and promotional expenses. That pushed the net loss to ₹1,148.5 crore.

So the real question is not simply whether Amazon Pay can generate more revenue. It is whether it can generate that revenue at a lower cost.

For now, the numbers show a business with considerable ecosystem reach but a sizeable gap between revenue growth, transaction economics, and profitability. And that gap is what Amazon Pay needs to close.