Paytm inks pact with Alibaba to enter US, China markets
One97 Communications Ltd, which runs mobile wallet and e-commerce venture Paytm, has inked a commercial agreement with NYSE-listed Alibaba Group Holding Ltd, its major investor, to expand its network to international markets such as the US and China, the Mint reported.
The deal, in turn, will help Alibaba introduce its financial arm Alipay in India's payments services industry, the newspaper said, citing Vijay Shekhar Sharma, founder and CEO of Paytm.
Paytm didn't respond to a Techcircle.in request for comment till the time of filing this article.
The report said also that the agreement with Alibaba's cloud computing arm AliCloud entails Paytm spending about Rs 120 crore to deploy Alipay's technology via AliCloud (also known as Aliyun).
As per the agreement, the payment services of the two firms will be integrated onto each other's platforms. This will allow Chinese users shopping with Paytm's Indian merchants to pay via Alipay while Paytm users in India will be able to shop with Alipay's existing merchant base in the global markets including the US, China, Japan and the UK.
"With Aliyun platform we will have access to services such as data analytics and insights into customer trends across markets where Alipay is present and it will help us build stronger merchant data base," Sharma was quoted as saying in the report.
For now, the company will allow Indian users to pay via its bank account linked to the Paytm wallet for purchases from global markets. The payment services will be integrated into Paytm as and when its payment bank services starts operations.
In August 2015, the Reserve Bank of India (RBI) had given in-principle approval to 11 entities including Sharma to set up payments banks. In December, Paytm appointed Vikas Purohit as vice president for its upcoming payments bank business.
Founded in 2000, One97 is a mobile-internet company that offers digital goods and services to consumers. It also provides mobile advertising, marketing and payments services to merchants.
Paytm counts SAIF Partners, Intel Capital and Silicon Valley Bank (now InnoVen Capital) among its investors. Ant Financial, a privately owned group firm controlled by Alibaba founder Jack Ma, has also invested in the company along with Alibaba Group. It also has small shareholders such as IDFC, Reliance Capital and Nikhil Vora.