Facebook's India offer can become Paytm's biggest headache

Facebook's India offer can become Paytm's biggest headache:

Facebook's $5.7 billion funding in Reliance appears to be the greatest challenge ever for Paytm, a SoftBank-backed leader in India's online payment industry, but losing support to deeper pocket competitors.
Facebook's India offer can become Paytm's biggest headache
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Facebook's WhatsApp, which has already been focusing on securing regulatory clearance for payment systems in India, is getting ready for the complete roll-out of such systems by June, according to a source familiar with the matter.
The alliance with Reliance, revealed on Wednesday, would provide WhatsApp with an expert on payments to Reliance's retail company, which aims to service tens of millions of small shops throughout India. This will also be able to connect up with Reliance's telecommunications company, which has been storming the industry since its release at the end of 2016, and WhatsApp itself has an immense footprint in India with more than 400 million users.
"If anyone had lost their sleep when the Facebook-Reliance deal had been confirmed, it must be Vijay Shekhar Sharma," said the second source, referring to Paytm's owner.
The source, which has strong links to both Dependency and Paytm, declined to be revealed in order to protect business interests. Opposed to other big names in India's digital payment industries, Paytm is shown to be more prone to violence, even on the back in rivalry with Alphabet's Google Pay and Walmart's PhonePe.
Although it has recently drawn funding from Japan's SoftBank (9984.T), China's Alibaba (BABA.N) and the U.S .- based Berkshire Hathaway (BRKa. N), it lacks its own funds to finance, placing it at a disadvantage. Paytm still remains unprofitable, with a loss of more than $500 million announced by its parent company in the year ended March 2019.
Released a decade ago as a smartphone recharging network, Paytm developed rapidly after Uber's ride-hailing firm recognized it as a fast payment alternative. Its usage began to swell in 2016 after the ban on strong-value currency notes sparked digital payments. Yet the effect of the state-backed digital payment program that was carried out in 2016 has been ignored.
Google Pay and PhonePe combined accounted for almost 80 percent of the 1,31 billion purchases on the network during January. Paytm was a distant third with around 10%, according to data from the payment company Razorpay. India's online payment sector is forecast to more than double to $135 billion in 2023 from 2019 rates, according to a report by PwC and the Indian business lobby organization ASSOCHAM.

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