Paytm is a major player in the flourishing Indian fintech market.
Mobile payments is a rapidly growing market in India, with the government ban on high-value bank notes and emphasis on fintech payment options encouraging residents to adopt digital payments across the country.
In September of this year, Google announced the launch of Tez, a mobile wallet offering for the Indian market. Paytm is still the top payments app in the country, and it yesterday (2 November) launched a feature that could make WhatsApp nervous.
According to The New York Times, WhatsApp is used by approximately two-thirds of India’s 300m smartphone owners, and it has a payments service for India in development, which it plans to roll out in the next few months. In August, it was reported that WhatsApp was already testing verified accounts for businesses.
Messaging and finance rolled into one package
Ahead of the introduction of the new feature, Paytm – which is backed by Alibaba and SoftBank among others – debuted an update of its service, which now includes a chat feature called Inbox.
In a statement, the company said that the platform has end-to-end encryption, and private and group chats are also available. Users can carry out financial transactions with friends, family and businesses as well as having regular conversations.
Inbox also has a feature much like the one WhatsApp recently announced, which allows users to recall messages sent by accident. Currently, the feature is only available on Android, but the bulk of Paytm users have devices using Android OS, according to TechCrunch.
The chosen approach of integrating payments and messaging was explained by senior vice-president of Paytm, Deepak Abbot: “There is a need of social messaging, commerce and payments seamlessly blending into one another.”
Like Tez, WhatsApp’s service will likely be limited to transferring funds from one person’s bank account to another’s, whereas Paytm handles credit and debit card payments, electronic transfers on the government system, and digital wallet transactions.
A digital India
The advent of mobile payments in India comes as part of a wider push from its government to digitise the country.
According to the World Economic Forum: “The move could curb corruption and ‘black money’ in India as well [as] introduce a more robust, effective tax system. It could also make payments a completely secure affair, bringing an unprecedented formality and modern bureaucracy to the Indian economy.”