Paytm, India’s largest online payments and mobile wallet company, will invest another Rs 5,000 crore in the business over the next three years, founder Vijay Shekhar Sharma said, while playing down competition from deep-pocketed global giants including Google.
“The biggest threat for us will be us, not anybody else,” Sharma said in an interview. But the entry of global companies, he granted, would bring to India’s digital payments market the “attention that is needed” and lead to rapid standardisation of products, better consumer understanding and more applications.
“Paytm has invested more than Rs 5,000 crore in mobile payment… As a company, we have invested the most and will continue to be the largest investor (in digital payments) in the country,” he said, adding that the firm would double its investment in its payments business over the next three years.
Paytm owner One97 Communications announced a $1.4-billion, or Rs 9,000-crore, equity financing round from SoftBank in May. The Noida-based firm, which is backed by China’s Ant Financial as well, also plans to become the largest issuer for the government-backed Unified Payments Interface (UPI) although competitors including Flipkart-owned PhonePe and Google Tez have a significant lead.
While PhonePe has been working with UPI since last year, Tez launched in September.
Paytm’s launch of UPI services comes nearly a year after the demonetisation of Rs 500 and Rs 1,000 notes, which gave impetus to India’s digital payment sector.
Since then, several global companies have started entering the domestic e-payments market, and several including Paypal and WhatsApp are expected to begin their payments services in India soon.
Overall, though, Paytm has a significant headroom with more than 200 million registered users as compared to Mobikwik’s 65 million and PhonePe’s 45 million.
With the addition of UPI to Paytm, Sharma said the company will have an edge over competitors with its network of more than 5.5 million merchants.
Paytm expects the number of peer-to-peer (P2P) transactions on its platform, which is the largest UPI usecase, increasing from 100 million to 200 million per quarter with the addition of Unified Payments Interface.
The biggest advantage Paytm has in comparison to peers using UPI railroads is that their customers can create their own handles with Paytm.
Industry experts say that gives Paytm an advantage as banks get a share of the revenue generated for every transaction through the aggregators while in case of Paytm there will be no such sharing.
Paytm’s payments banking operations also position it at an advantage over non-bank payment companies, but the challenge will be to get people to start saving significant amounts with Paytm
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