Home News and Updates Tough time ahead for Paytm because of Jio Facebook Deal, 3 important reasons

Tough time ahead for Paytm because of Jio Facebook Deal, 3 important reasons

by Deepthi Sharma
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Reliance Jio Facebook deal We shared about Facebook investing $5.67 billion into India’s biggest carrier, Reliance Jio & Facebook can cause problem for Paytm and it can be serious.

Facebook’s $5.7 billion investment in Reliance promises to be the biggest headache for Paytm, a SoftBank-backed pioneer in India’s digital payments market but which has been losing ground to rivals with deeper pockets.

Facebook-Jio big Partnership made a tough time for Paytm

If someone would have Nightmare as the Reliance Jio Facebook deal was announced, it must be Vijay Shekhar Sharma, Paytm’s founder.

About Paytm & its Competitors

Paytm was founded in August 2010 with an initial investment of $2 million by its founder Vijay Shekhar Sharma in Noida. It started off as a prepaid mobile and DTH recharge platform, and later added data card, postpaid mobile and landline bill payments in 2013.

Compared to other major payment app in India’s digital payments markets, Paytm is seen as more vulnerable to attack, because it is already in competition from Alphabet’s Google Pay and Walmart’s PhonePe.

While having previously attracted investments from the likes of Japan’s SoftBank, China’s Alibaba and U.S.-based Berkshire Hathaway, it lacks its own wells of capital for funding, putting it at a disadvantage.

Why Paytm should worry of Jio Facebook deal?

Reliance Jio Infocomm Limited or Jio has a short but strong history of decimating their opponent. When Jio launched India’s first fully 4G only network, voice calls are made free & mobile data is made more than 90% cheaper than the competition causing more than half a dozen telecom operator collapsing or merging. Even Vodafone India & Idea Cellular Ltd has to merge to take on Jio.

1. WhatsApp trying to enter Payment Market

Reliance Jio has user base of more than 370 million, WhatsApp has more than 400 million users in India. WhatsApp is already on final stage of their Payment solution based on UPI, While Reliance Jio also offers similar functionality for recharge, bill payment & more.

2. Jio Trying to enter ecommerce business

However, Paytm has expended their business from Mobile Recharge to Mutual Fund & Insurance but still the majority of market share is for Mobile Recharge & Bill Payment, Wallet Money Transfer & e-Commerce through Paytm Mall.

3. Paytm running on loss

As Paytm has been continuously making loss and still need near about 5 year to become profitable, Reliance Jio & Facebook deal has potential to take on market with exciting deals and larger user base.

Well, the time will tell what happen, but based on ongoing situation & government promotion ecommerce, Jio could really get a solid boost to kickstart their long pending dream of entering retail online market as Jio Facebook deal has given Reliance Jio Infocomm Ltd much required financial support.

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