Paytm founder Vijay Shekhar Sharma has never shied away from voicing his admiration for SoftBank founder and CEO Masayoshi Son. Just two months back, the Japanese conglomerate pumped in $1.4 billion in the digital payments platform - the largest fund infusion by a single investor in a desi start-up. And now, the buzz is that their partnership is ready to go global.
According to Bloomberg, SoftBank Group Corp. will be starting a mobile digital payments service in Japan in collaboration with Paytm by the end of this year. In fact, a formal announcement about the same is imminent. Citing sources in the know, the report added that the new service will make extensive use of artificial intelligence for mobile payments and other financial services, and dozens of Paytm employees are currently working in Tokyo to get it up and running.
But with this development, Son is moving into an already-crowded field and will have to compete for a toehold against local banks and technology companies. Line Corp., Japan's biggest instant-messaging service, and flea-market app Mercari Inc., for instance, have both been pushing into digital payments. Moreover, recent regulatory changes in Japan - supposed to come into effect in the next two years - are fuelling further interest in the consumer trend away from using cash.
Significantly, the news agency reports that Son's plans are not limited only to Japan. According to sources, SoftBank wants the Japanese program to give the company a launchpad to take the service global. Furthermore, the Tokyo-based company, which owns the nation's No. 3 wireless carrier, could expand the payments system to add financial services such as lending, insurance and other services.
This spells a huge opportunity for Paytm. The sector, incidentally, is yet to see a clear winner on the global stage. All the emerging contenders like Ant Financial, Paypal Holdings Inc., Tencent Holdings Ltd and even Paytm have, so far, seen success only in limited geographies, while efforts by behemoths like Apple Inc and Samsung Electronics Co, have not been able to make a mark.
Will Son, who created the world's largest technology investment fund, get any luckier in his attempt? That remains to be seen, but the collaboration could prove a valuable learning for Sharma and help expand Paytm's global footprint. Last May, Paytm Canada was born, allowing Canadians to pay their bills on the app, and now the company is readying to say Kon'nichiwa, or hello in Japanese.