Paytm to launch a messaging service like WhatsApp

Whatsapp is integrating UPI for payments, and this might lead to a shift in P2P payments that mean away from Paytm, to Whatsapp. Remember that Whatsapp’s business head Neeraj Arora is on the board of Paytm.

Mobile payment company Paytm, backed by Chinese payments and ecommerce major Alibaba, is planning to launch a messaging service, as reported by WSJ and Reuters. The messaging service will, according to the story, be “embedded in its payments app, and allow users to send audio, video, pictures and texts.

The mobile payment platform is expected to make an announcement on this by the end of August, and most people believe that Paytm could go head on with WhatsApp’s upcoming payment service, which is likely to go live real soon. Remember that Whatsapp’s business head Neeraj Arora is on the board of Paytm.

Whatsapp is integrating UPI for payments (allowing transfer of money from bank account to bank account), and this might lead to a shift in P2P payments (and not person to merchant payments) away from Paytm, to Whatsapp. This would then be a defensive move from Paytm.

However, there is more than one reason why Paytm wants to enter the messaging arena, which is already crowded with players like Hike, Facebook and the biggest of them all, WhatsApp.

Increase user base and engagement:

Social messaging is a major piece of our digital lives these days. Earlier, you had the BlackBerry Messenger (BBM), which was popular to the that people bought the phones back then just so that they could chat with each other via BBM.

Then, with Androids, you have WhatsApp, which recently timed over a billion active userbase across the globe, which is amazing accomplishment for the now Facebook-owned platform.

Messaging is a general practice that forces users to remain active for whole day, and for businesses, that is a gold mine which has been unexplored. It’s another matter altogether that not all experiments on this front work out successfully.

Perhaps Paytm is trying to increase the number of active users on its app or for its service by incorporating messaging. Paytm will have to do something significant to get people to message each other and remain active on an app which by itself doesn’t have a daily use case in India, for now.

I don’t know: maybe Rs 100 cashback to a Paytm wallet every time a user sends 1000 messages.

For instance, e-commerce platform Flipkart tried its fortune with Ping not that long ago, but nobody signed up for it because everyone was already hooked on to WhatsApp. This is where Paytm will have to make sure the incentive to use their messaging service forces people to get actively hooked to them.

Whatsapp is in a different league:

Whatsapp is in a different league, with over 200 million monthly active users. Globally, a staggering 76% of Whatsapp’s 1.3 billion monthly active users users are daily active users. Assuming the same ratio for India, Whatsapp would have 152 million daily active users.

Paytm, it is reported, has 225 million users, but these are registered users, and not monthly active users. In the past, Paytm has declined to disclose its monthly active users. In the month of March, there were only 241 million mobile wallet transactions across the wallet industry – including other significant payment companies like Mobikwik. It’s unlikely that there are 200 million monthly active users in the digital wallet industry as a whole.

Apps — Gateway to Digital Payment:

WhatsApp, Amazon, Google and Samsung among others, are after India’s booming digital economy, and the numbers speak for itself. According to a recent Google report, the market size of digital payments in India is expected to touch $500 billion by 2020.

The report, more importantly, highlights non-cash transactions in India are going to exceed cash transactions by 2023. While we all know that Facebook bought WhatsApp for over $19 billion in 2014 for its large user base, the end motive could very much be focused on making it a payment platform as well.

Paytm missed a chance earlier

Remember that Paytm acquired a messaging application Plustxt in August 2013. Scroll up and see that Whatsapp chart again, for August 2013.

Paytm had an opportunity to get into messaging, with a messenger with Indian language capabilities – something that Whatsapp, I guess, it didn’t have at that time. Now it has multiple Indian languages. Of course, this missed opportunity is not something that one can hold against Paytm: they picked ecommerce as their focus, then payments, and in 2015, raised their first large funding from Alibaba Group co Ant Financial, and became what appears to be the largest consumer focused payments business in India.

With everything taken into account, it stays to be perceived how Paytm chooses to actualize the reputed informing administration, and how distinctively would they be able to offer the component. What’s you think, drop your comment below.

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