Paytm to merge its mobile wallet service with its payments bank in India
One 97 Communications, the parent company of digital payments provider Paytm is preparing to merge its wallet service with the eponymous payments bank– the licence for which is owned by its founder Vijay Shekhar Sharma— once it receives regulatory approval.
The Noida-based company had incorporated Paytm E-commerce Pvt Ltd and Paytm Payments Bank Ltd as separate entities in August. The company also operates an ecommerce marketplace, which is expected to be spun off and serve as an entry pad for online retail operations of Chinese ecommerce giant Alibaba according to sources aware of the plans within the company.
“As per the directions of RBI, the company will transfer its wallet business to the newly-incorporated Paytm Payments Bank Limited (PPBL) after receipt of necessary approvals,” a spokeswoman for Paytm told ET. She declined to comment on the entry of Alibaba into the Indian e-commerce sector through the Paytm marketplace, terming it as ‘speculation’.
Alibaba’s digital wallet Alipay is in a technology sharing partnership with Paytm. The combined entity of Alibaba and its subsidiary Ant Financial hold 40% stake in One97 Communications, having invested about $680 million in the company.