By Raunak Haldipur
It is no surprise that Paytm has gained the most from demonetisation. “Paytm karo“ was publicised widely and the company gained many users overnight. Paytm is now valued at $8 billion as India’s top digital wallet. The company’s store has also started selling merchandise. Interestingly, Paytm’s largest shareholder is Alibaba. Although Alibaba couldn’t beat WeChat regarding messaging services, they have their own payment app called Alipay. Alibaba may be working quickly to leverage Paytm in India and replicate WeChat’s model in Paytm.
WhatsApp Collaborating with NPCI
There was news about WhatsApp working with the National Payments Corporation of India (NPCI) to come up with Unified Payments Interface (UPI). UPI integration in WhatsApp will make money transfer very easy. UPI’s strongest feature is its ability to work directly from of a person’s bank account. There will no longer be a need to share one’s bank account details when transferring money. UPI is also compatible with the banks. The threat from WhatsApp may cause Paytm to leverage their existing user base and launch a messenger as soon as possible.
Paytm to be a one stop shop
On February 2017, WhatsApp and Paytm hit the mark of 200 million users in India. WhatsApp has a monopoly in messaging while Paytm is known for their payment services. However, both these companies are hoping to pivot their business models. As a result, there may be two significant consequences. Either people will simultaneously use both apps or one of the apps will start losing out to the other. WhatsApp will most likely have the edge over Paytm when it comes to payments due to UPI. Paytm may also follow suit, but they may lose their reputation of being a payment wallet due to UPI’s unique feature.
Paytm wishes to build an ecosystem around their app, including shopping, transferring money, paying bills and messaging. By being a one stop shop, Paytm wants to have the edge over WhatsApp with its varied services. Paytm also has a payments bank license which means that they are effectively a portable bank where people can keep deposits. However, Paytm cannot lend money. It can only make money through transactions.
The emerging rivalry
It is too early to determine whether WhatsApp or Paytm is the better app, as they are also backed by Alibaba and Facebook. Both companies have enough financial backing. They will try their best to topple one another. It is interesting to see how two companies with extremely different business models would soon be rivals by making simple changes in their models. We will certainly be witnessing some exciting developments in the next few months.
Features Source Image: Pexels