SoftBank pours $1.4bn into India fintech player Paytm

2 May 2017

Image: Have a nice day Photo/Shutterstock

For anyone who thinks innovation in payments has peaked or that the market is saturated, think again: SoftBank is still betting big.

SoftBank, a Japanese telecoms giant with fingers in as many pies as you thought possible, has revealed its latest trick.

Not content with organising a $100bn ‘vision’ fund to invest in various cutting-edge technologies (with Apple just one of the companies involved), financing the next stage in autonomous transport or developing tomorrow’s revolutionary SIM cards, Softbank wants to help us pay for things.

The payments aspect is perhaps the most developed of all in banking, with changes throughout the service chain seeing the likes of fingerprint authentication on some bank cards, or smartphones replacing others.

Every corner of the world has different needs in this regard, and SoftBank views India as a prime market to work in.

Reports are growing that SoftBank is putting $1.4bn into India’s Paytm, placing a bet on a continued surge in the spread of mobile phones to make payments in the country.

Paytm, the flagship product of One97 Communications, is India’s largest digital goods and m-commerce platform. It is also a leading payment-solutions provider for merchants through its semi-closed wallet. One97 has enjoyed many large funding injections, bringing its value to $4.2bn not long ago.

Should SoftBank’s interest be confirmed, that valuation will soar towards $7bn.

Bloomberg, though, suggests that SoftBank is not enjoying a clean run at Paytm, with two other companies in discussions to invest.

A move into India makes sense in this field, with state-led activities encouraging more and more of the 1bn population to go digital and ditch cash in recent years.

SoftBank is not one to shirk from major investments. Last year, its £24bn purchase of semiconductor manufacturer ARM went through, the biggest move in the attempt to corner a substantial portion of the IoT market that is rapidly bringing devices of all shapes and sizes online.

Gordon Hunt was a journalist with Silicon Republic