Paytm mobile payments: will it emerge as a dominant design in India?

Abstract

February 2019, Amazon launches its UPI enabled Amazon Pay in India. This marks the entry of now four large players in this space – namely, Google Pay backed by Google, PhonePe backed by Flipkart (Walmart), Paytm backed by Alipay, and now, Amazon Pay backed by Amazon. Paytm, currently the leading player in the Indian ecosystem of mobile payments, is also confronted with the possibility of full-fledged arrival of Apple Pay , Samsung Pay , and WhatsApp Pay into the space. Not only does the large private players seem interested in Indian digital revolution, but also the other emerging home-grown Indian startups – MobiKwik, Freecharge, Razor Pay etc. The vision of the Indian government to become a cashless economy has also seen a major push by the government themselves. Government’s initiative of introducing the Unified Payments Interface (UPI) has met with great success with Google Pay, Paytm, and other big and small players adopting the platform. This has enabled more financial inclusion within the country and has provided the earlier mobile wallets a uniform way to transition into a digital banking portal without even being affiliated to the banks themselves. Although, Paytm - one of the pioneers in the mobile payments space in India, has greatly benefitted by the government’s push for cashless economy, financial inclusion, and UPI platform, it currently finds the overall dynamics in the industry not very well suited to them. Some of the challenges that they face include, but not limited to, how to strengthen their position in the industry, to aspire for market leadership or push for profitability, how to face the new heavyweights (Google, Walmart, Facebook, Apple, etc.), whether to expand/diversify, how to create a moat around for their business, etc. While Paytm ponders over these issues, they are also looking forward to answering the larger issue at hand. Is the war they are in, a war for profits and money making? Or is it a war for data? Or is it a war for ecommerce dominance in India? Or is the war about something even bigger? Why are so many competitors with different backgrounds and different primary motivations presenting such a strong candidature in this industry?