Paytm is India’s most valuable start-up © Reuters

Competition in India’s digital payments market was already fierce, but over the past month the rivalry between two leading groups has escalated into a more serious spat.

Paytm, India’s most valuable start-up worth an estimated $16bn, has bumped up against Google in a wide ranging dispute spanning everything from fantasy gaming to app building.

The conflict escalated when Google briefly removed Paytm’s app from its Play Store last month, alleging that it had violated Google’s gambling policies with a real-money cricket promotion.

Google then sparked outrage from start-ups by pushing a Play Store policy that would give the internet giant a hefty cut of in-app transactions, prompting a backlash that led Paytm to promote its own app store as a homegrown alternative.

Central to their rivalry, however, is digital money. Patym was an early darling of consumers and investors in the world’s fastest-growing cashless payments market, raising billions from the likes of Ant Financial and SoftBank.

But the arrival of deep-pocketed competitors including Google piled pressure on Paytm, which alleges that the tech giant used its dominant Android mobile operating system — which has a market share of over 90 per cent — to tilt the payments playing field in its favour.

Google “clearly see[s] no hesitation in using their dominant market position to push payments,” Madhur Deora, Paytm’s president, told the Financial Times. “That’s pretty much the definition of anti-competitive behaviour.”

Google has pushed back against Paytm’s claims, emphasising that users of its Play Store can access a range of payments services, and that there is no requirement for Google Pay to come pre-installed on Android devices.

“India’s digital payment space continues to evolve and is expanding at a very healthy rate with many new entrants, and a growing number of established players in the industry,” Google Pay said. “We work hard to innovate and to create optimal experience in order to compete in the space.”

While Paytm says it has 150m monthly active users, Google’s app leads in the share of transactions made over the fast-growing Unified Payments Interface, a government-backed system that allows easy, instant bank-to-bank transfers.

But the squabble highlights how payments are ultimately a means to an end. While digital money is not always lucrative in itself, it is a springboard to pile on a range of other financial and digital services.

While Google already has leading businesses in areas such as digital advertising, diversifying beyond payments is more important for Paytm. It has laid out plans to become a “super app”, offering consumers a full suite of services in one place, and has branched into everything from banking to gaming to ecommerce.

Patym presented its new mini app store as an alternative for developers unhappy with Google’s fees, but this could also prove to be a powerful new business tool as it looks for a new way to bring, retain and monetise customers.

Paytm says 300 apps are already participating — including Domino’s Pizza and Ola Cabs — and that 5,000 more are coming.

Mr Deora outlined Paytm’s ambitious vision:

“What if the consumer can discover ‘everything’ on Paytm?” he said. “Clearly we’re not going to build the product for everything . . . [but] we can help them with what we can be good at: Helping find customers, the checkout experience, the log-in experience.”

Quick Fire Q&A

Company name: Tractable

When founded: 2014

Where based: London

CEO: Alex Dalyac

What do you sell, and who do you sell it to: We develop artificial intelligence to aid recovery from accidents and disasters. Customers include insurers Tokio Marine, Covéa and Ageas.

How did you get started: With accidents and disasters, every recovery starts with a visual appraisal. We realised artificial intelligence could accelerate this at scale.

Amount of money raised so far: $55m

Valuation at latest fundraising: Between $180m and $250m

Major shareholders: Georgian, Insight Partners, Ignition Partners, Zetta

There are lots of fintechs out there — what makes you so special: Our artificial intelligence accelerates claims, creating efficiencies for the insurer, and a better experience for the customer.

Further fintech fascination

Follow the money: Ant Group’s much-anticipated IPO is fast approaching. The Financial Times has taken a look at the Chinese company’s overseas ambitions, with 10 per cent of the IPO proceeds earmarked for international expansion. It is not all plain sailing though. Ant is under scrutiny for the way it has marketed the IPO to retail investors.

Crypto chronicles: The Financial Times reports that OKEx, one of the world’s biggest cryptocurrency exchanges, halted withdrawals after it lost touch with an employee who is “co-operating” with a Chinese government investigation. The official is a holder of private keys that enable the authentication of transactions.

Dealmakers: Stripe has bought Paystack, a Nigeria-based payments company which has 60,000 customers, says TechCrunch. According to TechCrunch, sources close to the deal say that it is worth over $200m, although the companies have not disclosed the terms. Stripe raised $600m earlier this year, partly to fund international expansion.

Trendwatch: Sifted reports on the new fintech “mafias” — the people that helped to start the likes of Klarna, Revolut and Monzo and have now become founders themselves. Ten former Klarna employees have gone on to start new ventures, including Kevin Albrecht, who used to work in the Klarna product team and went on to found PFC, a Swedish neobank.

AOB: The chairman of the US Securities and Exchange Commission said that it was working on rules that could permit the creation of crypto ETFs, reports the Financial Times; Clair, an American payday lending start-up, has raised $4.5m of seed funding, according to Finextra; Wealthsimple, a Canadian robo-adviser, has reached a $1.5bn valuation in its latest fundraising, reports Fintextra; the Financial Times has produced a special report on payments that features insights into Wirecard, the Turkish payments scene and the impact of the pandemic.

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