Ant Financial Services Group, an Alibaba affiliate, closed a deal for a 25 per cent stake in India firm One97 Communications, as it looks to tap into the country’s huge potential for mobile and online payments.

One97 is the owner of leading Indian mobile payments firm Paytm.

Speculation has been floating for a few weeks about a deal but now it is official, although the price has not been disclosed. A Reuters source pegged the price at $500 million and said One97 is also planning a stock exchange listing.

Ant Financial Services Group runs Alipay, China’s largest online payments system.

“This partnership between Ant Financial Services Group and Paytm will foster the growth of India’s digital payment ecosystem,” the companies said in a joint statement.

The deal makes One97 one of the valuable tech start-ups in India. Its platform enables users to carry out financial tasks such as paying utility bills.