Alibaba to Spend $500 Million on Indian Mobile Payment Service

by Tristan Hugo-Webb 0

News is emerging from India that Chinese e-commerce giant,Alibaba is in talks to buy an approximately $500 million stake in the parentcompany of leading Indian mobile payment platform Paytm. Under the reportedterms of the deal, Alibaba and its third party payment service provider Alipaywill take minority stakes as part of a two-stage investment.

Paytm allows Indian consumers to place funds in a mobilewallet, which they can in turn use to purchase goods and services or even payfor things like an Uber ride. Today, Paytm claims that it already has 20million users. However what might have appealed to Alibaba is that Paytm alsolaunched an online marketplace last year, providing a platform for business tosell products to customers online, much like Alibaba offers within China


Someone close to the deal speaking on the condition of anonymitysaid, “The two most exciting sectors in Indian technology are e-commerce andpayments, and they [One 97] have both. So while the business isn’t as big asAmazon or Snapdeal yet, they have the same parts as the Chinese, so it fitstogether perfectly.”

With its recent historic IPO, Alibaba is flush with cash andis capable of making significant investments in potential international rivalsas a means of cutting off future competition. Alibaba has always had broadglobal ambitions and if this deal with Paytm proceeds, the company will havemade a strong move in this regard.

Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service for Mercator Advisory Group

Read full story at Gulf News

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