Following India’s massive demonetization exercise last year – an effort to curb the spread of black money across the country – Paytm has grown its digital wallet service to a whopping 225 million users nationwide. Now, it’s set its sights on WhatsApp as it gears up to launch its own mobile messaging app.
The Wall Street Journal reports that that the company is slated to unveil the new service later this month. And while it might sound odd for a payments business to dive into messaging, it’s not as crazy as you might think.
For starters, it already has a massive user base in India, and many people already use Paytm to send money to each other. Allowing them to text and share media isn’t far-fetched if they’re already used to firing up the app to settle meal bills with friends, send money home to their parents and gift cash to loved ones.
Next, the Indian market has plenty of room for more messaging apps. While WhatsApp claims 1.2 billion users worldwide, only 200 million of those are in India. The country currently counts about 355 million users, and that figure is set to reach 500 million people who will come online via phones by 2020.
With that in mind, the time is ripe for businesses with the ability to scale and monetize to attempt to reach more customers with their mobile services. Oh, and Paytm recently raised $1.4 billion in funding from Japan’s Softbank, so it’s more ready than ever to take on a big challenge.
Paytm isn’t the only one interested in mixing messaging with payments: WhatsApp is reportedly working on introducing a P2P money transfer system in its app for users in India, and Hike, a rival chat service which claims 100 million users in the country, already supports payments.
Between mobile wallets and upcoming payment banks that allow people to make digital transactions without going through the hassle of setting up a traditional bank account – both of which are a big draw for the next hundreds of millions of Indians coming online from lower income groups – services like Paytm will become essential. And if they already have eyeballs on their app, baking in messaging to keep people glued to their screens longer only seems logical.
It’s worth noting that Paytm is also a marketplace for everything from clothing to electronics, as well as air and movie tickets. With the introduction of messaging, it’ll feel more like WeChat’s Swiss army knife app that’s hugely popular in Southeast Asia than WhatsApp’s one-trick pony. Nothing crazy about that, if you ask me.