With its payments bank awaiting regulatory approvals, PayTM has decided to merge its wallet service with the proposed bank. The company, which is present across numerous market segments i.e. ecommerce, mobile wallet, travel etc., is expected to spin off its ecommerce marketplace, and serve as an entry medium for its partner Alibaba. The RBI has granted “in-principle payments bank license” to PayTM Payments Bank Ltd, 51% owned by Vijay Shekhar Sharma, and the rest by One97 Communications i.e. PayTM’s parent arm. However, per regulatory requirements, a firm has to separate its ecommerce business from the payments business, thus the proposed spinoff.
Alibaba’s digital wallet Alipay is in a technology sharing partnership with Paytm. The combined entity holds 40% stake in One97 Communications, PayTM’s parent firm, having invested about $680 million in the company till now.
Post government’s move on demonetization, PayTM has been one of the prominent gainers of the push towards digital currency. Currently, the firm is clocking 5 million transactions every day, with combined traded goods/services value of Rs120 Crores.