Paytm on India’s digital payments sector


SINGAPORE — Indian tech start-up Paytm is “super comfortable” with its position in an increasingly competitive payments sector in the country, a top executive at the company said Monday.

Paytm is an ubiquitous name in India’s digital payments sector. Millions of Indians use the service to pay for things including utility bills, groceries, recharging mobile connections or buying movie tickets. Paytm is also a fully licensed digital bank.

The service faces competition from the likes of Google Pay, Walmart’s PhonePe and most recently Facebook’s WhatsApp messaging service, which announced a feature allowing its users to send money through the app.

Paytm, PhonePe, Google Pay (Gpay) and Bhim UPI QR Codes (Standee) are Kept outside for Cashless payments at a medical store in Gurugram on the outskirts of New Delhi, India on 16 May 2020.

Nasir Kachroo | NurPhoto | Getty Images

“It’s no doubt that India is the last big tech market in the world and it’s an open market,” Madhur Deora, president of Paytm, said on CNBC’s “Street Signs Asia.” The interview was part of CNBC’s annual East Tech West conference, which is being held this year both remotely and on the ground in the Nansha district of Guangzhou, China.

“Payments is — over the last six or seven years, especially mobile payments — has come to the forefront of consumer offerings and innovation in consumer tech,” Deora said, adding that “people have come to realize that if you solve the payments problem then there are many things that you can do with respect to commerce, with respect to financial services.”

I believe that Paytm is so far ahead in the innovation that can be built on top of the payments layer that I feel super comfortable about where we are.

Madhur Deora

President, Paytm

A big part of India’s fast-growing online payments infrastructure is the United Payments Interface (UPI), created by the country’s top payments processor, the National Payments Corporation of India (NPCI). UPI processed more than 2 billion transactions in October and is supported by most of India’s lenders. Its open architecture allows interoperability between payments apps using the platform, which facilitates peer-to-peer money transfer. UPI is currently dominated by PhonePe and Google Pay, leaving Paytm a distant third, according to reports.

UPI is just one part of Paytm’s business. Deora said the start-up has more than 50% market share in the merchant payments segment and provides services in other areas, such as banking and wealth management. Reuters reported that the company also aims to have more than one million apps on its “mini app store” by the first quarter of 2021.

“I believe that Paytm is so far ahead in the innovation that can be built on top of the payments layer that I feel super comfortable about where we are,” Deora said.

WhatsApp for its part would likely have an advantage in the payments market in India despite being a relative newcomer. More than 400 million people in the country already use the messaging service, which gives it a sizeable userbase right off the bat. Facebook’s investment ties with Jio Platforms, owned by India’s richest man Mukesh Ambani, offer another advantage.

“They have a shot,” Deora said about WhatsApp’s prospects in India. “If they are innovative and they build great solutions, that some consumers will come to them. I think that sort of goes without saying. But I’ll tell you it’s super hard to do so.”

He explained that convincing sellers to allow a company like Paytm or WhatsApp to handle their money requires trust and does not occur overnight.



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