Will Paytm's launch of chat feature be enough to rival WhatsApp's entry into e-wallet biz?
Paytm's decision to take on chat apps such as WhatsApp and Hike messenger with the launch of its own chat feature in the app may be launched as soon as the end of this month.
- Paytm expected to launch new chat messenger into its mobile wallet app
- Paytm has over 230 million user base on its app
- WhatsApp to enter the digital payment business with tie-up with UPI
Paytm is looking to launch a new chat messenger into its mobile wallet app that will allow its users to chat among each other. The company has over 230 million user base on its mobile wallet app and this new development will allow them to chat among the network, according to a recent Reuters report. The chat feature is expected to be launched as early as the end of this month.
This development comes after the largest social chat app WhatsApp announced its plans to partner with UPI to launch digital payments and wallet services through it.
The Paytm move seems to be a way the company is looking to take on the chat app and others like it such as Hike Messenger.
While Hike Messenger has already launched payments through its tie-up with UPI, the challenge Paytm will receive from WhatsApp could prove to threatening for the company that saw a surge in its fortunes after the demonetisation move by the government in November 2016.
WhatsApp has already over 200 million active users in India as of February 2017 and that number is fast growing with its rapid adoption in India. At the rate at which WhatsApp's user base is growing in India it could also have eclipsed Paytm's users.
Besides this, WhatsApp reaches even the rural population and is used by even small and medium business men in India that uses it to communicate. The payments option is taking it only one step ahead and may also lead to faster adoption.
The move of WhatsApp and Hike Messenger is inspired by Chinese social chat app WeChat which began as chat app and then introduced payments, which went on to become very popular in the country.
Paytm has been trying to protect its lead in the Indian market and keep out western companies from winning the market.
Neil Shah, Research Director, Counterpoint Research in an earlier Zeebiz article said, “If you look at Paytm it leads by a wide margin. Next competitors would be the government's UPI or BHIM app and MobiKwik. However, they are at a big distance as Paytm has expanded considerably in the last 2 years in the online and offline payments space. The only closest competition for Paytm would now be WhatsApp's digital payments with the reach that it has in the country.”
“Small and medium business men in India already use WhatsApp in India to communicate. By adding another option of payments it will find greater adoption. Take a look at WePay in China, which is part of WeChat, and has become the most popular way for digital payments in the country. Besides this WhatsApp, which is part of Facebook, has much more muscle in terms of marketing than Paytm,” Shah said.
Besides being used by SME businessmen it is used by several across India and even penetrates into rural Indian households. Something digital payments companies are looking to tap into as this could unlock a huge user base for them.
While WhatsApp may be a threat to Paytm, the other way around may not be so as people will not download Paytm for just messaging each other.