![]() While e-wallets have to be periodically topped up with funds, in UPI transactions-which are also conducted via smartphone apps-money is deducted instantly from people’s interest-bearing bank accounts. Paytm has also had to contend with much more competition after India introduced a government-run digital-payments network called the Unified Payments Interface, which facilitates direct transfers between bank accounts. Its revenue from payment and financial services has increased, but total income declined in its last fiscal year because the pandemic hurt some of its other businesses. ![]() Unlike Ant, One97 hasn’t produced an annual profit in recent years. ![]() Top executives at Ant and One97 still maintain regular communication and sometimes consult each other on strategic decisions, the people said. Jing needed to turn more of his focus to the Hangzhou-headquartered company’s internal affairs following its scuttled IPO, people familiar with the matter said. The change-which took place earlier this year-was initiated by Ant and took place at a time when Mr. Last year, deadly border clashes between China and India sparked a public and political backlash in the South Asian country against mobile apps owned by companies in China.Īfter India started to apply more scrutiny to Chinese investments, Ant Chairman and Chief Executive Eric Jing, a Chinese national, was replaced on One97’s board of directors with Douglas Feagin, another Ant executive and a U.S. Ant’s global ambitions have also been complicated by geopolitical tensions. India had around 500 million smartphone users at the end of 2019, according to techARC, a research firm.Īnt dialed back its direct involvement in Paytm after Paytm’s development got under way. As of March, One97 served 333 million consumers, about a third of whom transacted on Paytm’s platform at least once during the preceding year, according to the company’s draft IPO prospectus. Paytm didn’t reach that goal of having half a billion users by 2020. “He’s an eternal optimist and a very bullish talker," said Chris Skinner, a fintech industry commentator who published a book called “Digital Human" in 2018 that included an interview with Mr. He predicted a few years ago that Paytm would have half a billion users by 2020. Buffett and Ant’s controlling shareholder, Jack Ma. Sharma, who founded One97 in 2000 and is its chairman and CEO, has in the past drawn parallels between his modest roots and the backgrounds of Mr. Paytm boasted 225 million subscribers by 2017, more than any other company in India, and Berkshire paid about $300 million the following year for a small stake in One97. Paytm became synonymous with e-wallets, digital accounts that could be used to pay utility bills, and buy everyday goods and services such as milk packets and train tickets. Paytm’s mobile-payments app experienced a surge in downloads during that period, after India’s government suddenly canceled 86% of the country’s physical cash in circulation in a bid to root out corruption, tax evasion and counterfeit bills. Between 20, Ant dispatched engineers and technical staff-around 100 at one point-to Paytm’s offices in Noida to help scale up its payments platform and tackle issues such as fraud prevention, according to people familiar with the matter. Of those companies, Paytm, pronounced pay-tee-em and an abbreviation for “Pay through mobile," gained the most local traction. It also bought minority stakes in other digital-payments companies in Southeast and South Asia. ![]() Early on, Ant had ambitions to replicate its success in China in other developing markets, and the investment in Paytm was a key part of that project. Ant intends to reduce its stake to under 25% from 29.6% now, according to people familiar with Ant’s thinking.Īnt and its sister company Alibaba Group Holding Ltd.-which owns an additional 7.2% of One97-first invested in Paytm’s owner in 2015, before the business experienced a surge in users. The listing will generate hefty profits for 43-year-old founder Vikay Shekhar Sharma and a star-studded list of investors including SoftBank Group Corp.’s Vision Fund and Warren Buffett’s Berkshire Hathaway Inc.Īnt has invested around $900 million in One97 and would be among the biggest winners in the deal, which is taking place at a time of simmering tensions between India and China. One97 Communications Ltd., which owns Paytm, is targeting a market valuation of $25 billion when it goes public at home this autumn. It has already been overtaken in one key area by deep-pocketed rivals including Alphabet Inc.’s Google and Walmart Inc.-backed Indian startup PhonePe. Now, as Paytm’s owner nears a $2.2 billion listing that will see it beat Ant to the public markets, the company isn’t the dominant player it wanted to become and faces mounting challenges in an increasingly crowded Indian payments market.
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