There's no doubt that India is a gold mine for Amazon (NASDAQ:AMZN). The company is tapping into the many opportunities in this region, ranging from e-commerce to smart speakers and even insurance, but it will keep pushing the envelope, as its latest move indicates.

Recent filings with Indian regulatory authorities revealed that the e-commerce giant has made a fresh infusion of $80 million into its digital payments business, Amazon Pay. This brings the company's total investment in Amazon Pay to more than $170 million over the past year.

A massive opportunity

Mobile wallet adoption in India is growing at an exponential rate. The value of mobile wallet transactions in the country has jumped 40 times in just five years, thanks to growing internet and smartphone penetration. Not surprisingly, a large number of online shoppers in the country now prefer paying through digital wallets versus cash or cards.

Digital media company GlobalData has found that the share of cash or check payments in India's e-commerce sector has dropped from 31% in 2013 to just 16% last year. Over the same period, the use of plastic cards has declined from 38% to 32%. Mobile wallets have been the biggest gainers, as their share of e-commerce payments has increased from just 7% to 29% over the same period, and they are expected to grab a bigger slice going forward.

One estimate puts the volume of mobile wallet transactions in India at a massive 260 billion in 2022, up from just 2.1 billion last year. Amazon clearly doesn't want to miss this gravy train, as mobile wallets open up the opportunity to add more products and services.

For instance, mobile wallet market leader Paytm started off with a payments app, and subsequently branched into an online marketplace and banking services. The Alibaba-backed company has also gotten into insurance products, which is a smart move, as it can now offer a wider selection of products and services to its 300 million-strong user base.

So Amazon needs to quickly ramp up its payments platform so that it can corner a bigger share of India's e-commerce market.

Amazon's plan

Amazon is now looking to aggressively boost the adoption of its digital payments platform given the potential that this market holds. The company doesn't list the number of Amazon Pay users it has in the country. But the most recent data reveal that the service saw a 126% increase in the number of transactions and a 68% jump in unique users last year.

Looking ahead, the company should be able to sustain this impressive momentum thanks to its recent initiatives to boost the adoption of Amazon Pay. Users can now make utility bill payments, order food, and buy high-value items using an equated monthly installment (EMI) option. The platform is now providing a credit limit of up to $800 (approximately 60,000 rupees) to users, just in time for the country's festive season.

Amazon believes that this EMI option will help it attract those 70 million customers who don't have access to a credit card while shopping on its site to its payments ecosystem. Additionally, the company is offering discounts on everyday items such as groceries, as well as cash-back offers when a user pays bills or makes a payment using Amazon Pay.

As the user base grows, the company can push other products to them as well, just like its rivals have done so far. Insurance, for example, is one such product that Amazon is reportedly planning to sell through the Amazon Pay app.

Consumers signing up to use Amazon Pay need to feed in their personal information, including government-approved identification. Amazon can use this data to serve customized insurance products to customers based on their needs and take advantage of a multi-billion dollar opportunity.

As such, Amazon's digital payments platform has the potential to fuel its growth in a variety of ways. So it makes sense for the company to ramp up its investment in this vertical, as it will be in a stronger position to attack the massive e-commerce opportunity in India.