Η Google and the Walmart Inc. are fast becoming preferred by customers of the Indian company, Paytm, a pioneer in the field of fintech, to cope with central bank restrictions and the possible closure of a key payments subsidiary.
Payments through Paytm in India's national transaction space fell by 14% to Rs1.65 trillion ($19.9 billion) from January, according to the National Payments Council of India. PhonePe, which is owned by Walmart, and Google's GPay process significantly more payments than Paytm, which is in third place, and both saw an increase in the value of their payments.
Read more: Paytm: 20% fall in the value of its shares
Paytm's decline implies that consumers are moving their usage to alternative services even before any disruption to its systems. The new restrictions affecting Paytm come into effect from 15 March and the company predicts that digital payment services will continue to operate after Application their. However, the company's stock has fallen since the regulation was announced in late January due to concerns that the restrictions would limit the fintech pioneer's prospects.
The value of transactions processed by PhonePe increased by nearly 7%, while GPay saw an increase of nearly 6%, according to NPCI data. Also, when measured by payment volume, Paytm declined while PhonePe and GPay advanced.
Companies do not earn money through transactions in the state-backed system, known as the "unified payment interface", but they gain Accessed at a huge base of millions of consumers to whom they can offer services such as insurance and mutual funds.
On 31 January, the Reserve Bank of India instructed Paytm Payments Bank - which operates independently but handles a significant part of its payments and financial services - to discontinue some of its activities. Although Paytm quickly entered into new banking partnerships to maintain its function The regulator's decision led to a sharp drop in its share price and affected customer confidence. Paytm's shares have fallen by almost 50% since the end of January.
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In his first public comments after the RBI action, Paytm billionaire founder Vijay Shekhar Sharma this week expressed confidence that the company its digital payments will overcome regulatory setbacks and return as a stronger company.
Both Paytm Payments Bank and Paytm, which trades as One97 Communications Ltd, are part of Sharma's fintech empire, but the bank is not listed. Sharma owns 51% of the bank, with One97 holding the balance.
PhonePe and GPay often outperform Paytm in transactions UPI, both in value and volume, even before Paytm's subsidiary bank faced financial problems.
Source: bnnbloomberg
