WhatsApp, Google is chasing a new $ 1 trillion payment market

The Indian market for digital payments remains a chaotic area where the rules are blurry about what players can offer. Photo: Aniruddha Chowdhury / Mint

The Indian market for digital payments remains a chaotic area where the rules are blurry about what players can offer. Photo: Aniruddha Chowdhury / Mint

Surendrasingh Sucharia always has a few thousand rupees, but can not remember when he used cash for the last time. The 29-year-old product manager in Bengaluru uses a range of smartphone apps, including Google Tez and Paytm, to pay for everything from $ 40 bags with groceries to street food that costs money. A mind-boggling array of digital payment companies from global names such as Facebook Inc. & # 39; s WhatsApp to Google are in a bottleneck to win Indian users with their payment services. On Monday, Mint reported that Warren Buffett & # 39; s Berkshire Hathaway Inc. will acquire an interest in Paytm.

Meanwhile, a number of other big names are expanding in the digital payment market of the country, including its banks, its postal service and its richest man, Mukesh Ambani.

India saw a short wave of digital payments two years ago when Prime Minister Narendra Modi's government banned most of the nation's existing banknotes, although the peak blew when new bills were printed. But last year a series of new apps has made payments ever simpler and the discounts and cash bonuses they offer are irresistible for young, urban users such as Sucharia.

Credit Suisse Group AG now estimates that the Indian market for digital payments by 2023 will reach $ 1 trillion of about $ 200 billion at the moment. According to Credit Suisse, cash is still good for 70% of all Indian transactions, and neighboring China is much more advanced with a mobile payment market valued at more than $ 5 trillion.

But local players have a stranglehold on China's digital payment area. Meanwhile, Modi's administration has welcomed foreign companies to expand financial services throughout India.

"This kind of promising market does not exist anywhere else", said Vivek Belgavi, a Mumbai-based partner at consultancy firm PwC India with expertise in financial technology.

Yet the Indian payment market remains a chaotic area where the rules are blurred about what players can offer. And users often switch between apps. Rahul Matthan, a Bangalore lawyer, says he has used all the leading payment apps, although he now limits most of his transactions to OHIM, Paytm and WhatsApp payments.

Experts like Vinayak H.V., senior partner in Singapore at McKinsey & Co., say that profitability for the industry is not close. Although it is too early to call the game, here are a few players with a shot in the prizes:

WhatsApp payments from Facebook

Beta testing of the WhatsApp payment service for one million Indians began in February this year.

Pros: WhatsApp is the most popular messaging app in India, with a quarter of a billion users sending sms and friends throughout the day. It does not have to be done in cash in order to attract customers, which is a huge advantage.

cons: The WhatsApp payment service is stuck in beta mode and the introduction across the country is hampered by regulatory questions about areas such as storage of user data. Meanwhile, the government has accused WhatsApp of not curbing false videos that have gone viral to its messaging service and have led to the lynching of more than two dozen Indians. This could further delay the full launch of its payment activities.

Google Tez

Google says the payment app traversed 50 million app downloads a few weeks ago. Google Tez quickly adds users and sprints to increase the total number of transactions using the country's Unified Payments Interface, or UPI, a system that is linked to more than 100 banks and enables real-time digital transactions.

Pros: Google's Chief Executive Officer, Sundar Pichai, said that Tez is central to the company's India strategy and is also the key to the global push of payments. The payment app is localized, supports various Indian languages ​​and chases young users with games that offer cashbacks.

cons: Tez has to contend with rival WhatsApp, whose strong user base comes from the messaging service. Google has late introduced a chat feature on Tez.

FlipKart & # 39; s PhonePe

PhonePe says it has 133 million app downloads.

Pros: When Walmart Inc. acquired a majority stake in PhonePe & # 39; s mother Flipkart Online Services Pvt. , the payment app has also acquired a worldwide backer. All signs are that PhonePe is already winning the Walmart financial levy with a recent infusion of about $ 66 million from Flipkart.

cons: Flipkart competitor Amazon puts steady capital in its own wallet, Amazon Pay, and increases its user base.


Backed by both China & # 39; s Alibaba and Ant Financial Services Co., Paytm is the largest digital payment company in India and says it has 150 million app downloads.

Pros: As an early player, it got a boost from the demonization campaign in India in 2016, when a shortage of cash drove millions to providers such as Paytm. The company has since built an extensive network of vendors and outlets with a robust system of cashbacks and discounts to retain users.

cons: Paytm users must go through a multi-tenders procedure because it is a licensed payment bank, unlike most of their digital wallet securities such as Tez and PhonePe. RBI recently temporarily excluded Paytm from hiring new users for non-compliance with procedures. The company said it has responded to the regulator's concerns.


Has 32 million app downloads. Designed by UPI, it is the government's own game in digital payments. The app is simple and fast, attractive for non-technologically savvy users in smaller cities and rural India.

Pros: The government has actively put pressure on OHIM to use Modi & # 39; s face to promote its brand, to determine transaction targets for banks and public utilities to increase the number of users.

cons: Despite an initial burst of popularity, it has not been able to keep pace with rivals, whose bottomless pockets have ensured that users are addicted to sweeteners.

Next in the row:

A brand-new India Post Payments Bank, set up by the State Department of Posts, starts its operations with 650 outlets and thousands of trained postmen who are flying to far corners to teach users how to use the app. In addition, Ambani & # 39; s digital payments through its mobile Reliance Jio service has the potential to rival rivals.

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