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Retailers scared of Paytm’s action; Walmart, Google attacked

Bengaluru/Mumbai/Chennai: In the grip of one regulatory actionPaytm is activating its sales team to reassure merchants who use its app to accept digital payments, like Walmart. Google Targeting the same sellers with their rival offerings.
Cash was once king in India, but Paytm is credited with revolutionizing India’s digital payments market, which will be worth $10 trillion by 2026. Backed by SoftBank, and earlier by billionaire investor Warren Buffett and China’s Alibaba, it has 100 million monthly users and made merchant payments of $61 billion between October and December.
But many merchants are now turning to Paytm after India’s central bank last week asked its banking unit – which primarily powers the popular payments app – to shut down most operations from March 1 for “persistent non-compliance”. Are refusing to deal with.
In southern Telangana state, about 2,000 shops have put up signs like “No Paytm, pay cash”, and some have even hidden the Paytm QR code, which customers scan to pay, said Mohammed Salahuddin, a local member. . retailers Organization.
“I have decided to avoid using Paytm. Customers will have to pay in cash,” he said.
To counter such concerns, the company is sending sales staff directly to customers ranging from roadside snack vendors to large retail outlets to ask them to use Paytm’s partner banks so they can continue receiving payments. More than 40 shopkeepers and several sales staff of the company said.
“We are getting a lot of calls from merchants,” said Paytm team leader in Chennai. He said each vendor there has been assigned the task of visiting at least 10 shops daily.
In a statement to Reuters, Paytm said customers are continuing to use its app, adding it is adding more merchants and there will be “no disruption” to sellers who are “natively able” to other partner banks. Can be transferred from”.
However, with around 15% of Paytm’s 40 million merchants needing to be migrated, the company last week said it would be a “major exercise”.
Very few shopkeepers in India are technology savvy, which further increases the challenge.
rivals cash in
Paytm has dominated digital payments in India, but its stock has fallen 39% since the crackdown, wiping $2.3 billion off its value. This potentially creates opportunities for larger rivals, including Walmart and Google.
Data from market intelligence firm Sensor Tower shows that Paytm app downloads last week declined by 20% compared to the previous week, while rival apps including Walmart’s PhonePe and Google Pay reported an average growth of 52%. Notably, PhonePe recorded 76% download growth.
A Reuters reporter received a push notification from Google Pay on Sunday to transfer his Paytm-linked mobile number for a bank transfer, and an industry source said many merchants were rushing to register with Google. Google said in a statement that it is supporting vendors and users.
PhonePe, which offers many of the same services as Paytm, took out a front-page newspaper advertisement targeting merchants, saying: “Business runs best when it runs on PhonePe”.
PhonePe said in a statement that it is seeing a surge in demand for its payments offerings, including its speakers: small devices that help digitally challenged retailers and ease payment tracking.
Speakers – which give audio alerts to sellers when payments are received – were pioneered by Paytm with its Soundbox, which is used by about 7 million Indian merchants.
Neil Shah, director of Counterpoint Research, estimates that Paytm’s rivals – PhonePe’s SmartSpeaker and Google’s SoundPod – have about 3 million such devices in India.
“This is where PhonePe and Google can hit now,” he said. “Paytm’s Soundbox and service has been a major stickiness factor for Paytm that has contributed to its success.”

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