China’s Alibaba is in “advanced talks” to buy a stake in India m-commerce firm Paytm, as the country’s mobile payments market looks set for rapid expansion.
According to Reuters, the deal would see Alibaba directly invest about $600 million in Paytm. The investment would value Paytm at around $4 billion.
Back in February, Alibaba’s financial arm, Ant Financial, agreed to buy a 25 per cent stake in One97 Communications, Paytm’s parent, although the price was not disclosed.
Both parties declined to comment about the most recent stake-building.
The investment earlier this year was Alibaba’s first foray into India, which has a fast-growing market in e-commerce, much of which is conducted via mobile phone.
And the opportunity goes wider than m-commerce. The Indian government is eager to promote financial inclusion, including by issuing new payment bank licences. The new banks will offer cash-in, cash-out plus money transfer. They are intended to attract users outside the conventional banking sector.
Paytm is among the bidders to become a payments bank, alongside Airtel M Commerce Services, a subsidiary of Bharti Airtel. Vodafone is also thought to be interested.