Shooting star

22 January 2021 By Una Galani Follow @ugalani

The $16 bln Paytm sought to emulate China’s e-commerce and mobile wallet pioneers, including backer Ant. But that model has come under Beijing’s scrutiny, and rivals like Google have broken Paytm’s grip on payments. Founder Vijay Shekhar Sharma’s startup has hit a tricky patch.

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Digital payments companies face a difficult path to monetise their businesses, Aditya Puri, former managing director of HDFC Bank, said in a Predictions 2021 event with Reuters Breakingviews on Jan. 18.

Google and others would like to monetise their customer base beyond advertising but don’t want to become banks, Puri added, questioning how they could achieve one without the other.

“If Paytm is not to follow the Alibaba model, I would be intrigued to know where their profit is coming from”, he added, referring to the Indian payment company’s effort to emulate the Chinese e-commerce company’s financial affiliate.

China has been looking at the dominance of payment companies. On Jan. 20, The People’s Bank of China released new draft rules defining a digital payments monopoly as any non-bank service provider with at least half the market for online transactions, or any two with a combined two-thirds share. Surpassing the threshold would make the company subject to antitrust investigations.

Paytm declined to comment on Puri’s remarks.

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Google and others would like to monetise their customer base beyond advertising but don’t want to become banks, Puri added, questioning how they could achieve one without the other.

Paytm declined to comment on Puri’s remarks.

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