Digital darling

21 December 2016 By Una Galani Follow @ugalani

Usage of Paytm, a mobile wallet, has soared among a nationwide cash crunch. The challenge will be to keep up the momentum. India is pushing digital payments hard but a government-backed rival looms. And having Alibaba as a backer could eventually backfire.

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India's One97 Communications will merge its wallet service, Paytm, with its soon-to-be-launched payments bank.

Payment banks can accept deposits up to 100,000 rupees ($1,471) per customer, pay interest, and issue debit cards but cannot make loans. These are new deposit-taking institutions in India.

The bank is 51 percent controlled by Vijay Shekhar Sharma, who is also the founder and chief executive of One97.

Chinese e-commerce giant Alibaba and mobile-money affiliate Ant Financial are large investors in One97. The duo invested more than $500 million in several rounds last year to own about 40 percent of the company, valuing it at roughly $4 billion, Reuters reported in September 2015.

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