Indian Payment Horizon – The New Battleground
Warren Buffet invests in PayTM
It all started with Softbank entering Indian payment space by investing in One97 Comm i.e. PayTM in 2017. Come 2018 and we have the biggest disruptor of the world, Warren Buffet, taking stake in PayTM. This is proof enough that the Indian payment industry is going to see an unprecedented boom in the coming years.
Warren Buffet’ Berkshire Hathaway was the only Major Fund house who did not invest in the dotcom and hence survived the boom. Ironically this is Warren’ very few investment ina technology focused company in a developing country.
India, with its booming economy and population is all set to act as the battle ground for global players looking to expand their business and capitalize on the young Indians who want to want spend. Club the purchasing power with the ease and security of payment app and we have a winner. With mobile and internet penetration reaching the dark depths of Indian geography and the added benefit that the services are cheap, thanks to JIO, there is ample scope for Indian payment companies to grow and expand.
The international investors are already vary of new players like Watsapp Pay, Google Pay, Amazon Pay etc but as PayTM has the customer base and the lead in penetration it makes sense to invest in it.
Others with their deep pockets and global expertise will try to capture the market and win over the customers as other players already have major inroads in India.
Watsapp Pay if passes the government regulatory hurlde and is abe to keep a clean sheet it may pose as the single biggest challenge to PayTM.
Goolge Tez, rebranded as Google Pay, is a major competitor too with India being a major Android market and Google’ penetration with its wide range of services.
In Dec, 2016, Prime Minister Modi made an effort to weed out black money from Indian system, with demonetizing old notes. This was a game changer for payment firms as they ramped up their promotions and within few months were present from movie theathers to local shop. This gave the much needed boost and the way forward for young Indian to make effortless payment.
India stills lags behind China in terms of digital payments. Indian currently stands at $200b of online transactions and expected to grow to $1 trillion by 2023, whereas China is currently at $5 trillion. There is huge scope of increase in India and hence the investor interest.
Eventually the customer is going to win as this will come with a lot of perks for the end user.