Paytm has launched a bill payment app in Canada, allowing Canadians to pay for utility bills using its app, including phone, cable, electricity, water and Internet bills, as well as property taxes and insurance. The company has taken a different approach in Canada, as compared to India: This has been launched as an app-only business, and if you go to Paytm.ca, you’re asked to download an iOS or Android app. In comparison, Paytm in India was largely a mobile recharge business (and we wouldn’t be surprised if it still is). The company claims that it aggregates thousands of service providers in Canada for bill payments; I couldn’t check because the app is incompatible with Xiaomi devices (Paytm in India works fine).
The most interesting feature listed on the site – and it’s odd that Paytm avoids mentioning this in its announcement – is that the app allows for bill payments for bills and recharges in India using Canadian credit cards.
Given that Canada has a large immigrant population from India, including former Paytm CEO Harinder Takhar (in pic above, with One97 founder Vijay Shekhar Sharma), who built Paytm’s payments business in India and set up and runs Paytm Labs in Toronto, this essentially allows Paytm Canada users to pay for bills in India.
Cross-border bill payments suggests that the natural progression for this business would be to enable cross-border money transfer to India. Money transfer is a massive global market, with players like Western Union dominating the business, and countries in the Asia-South Asia region are primarily recipients of this money, from the US, Canada and Europe. Most payments businesses in India have so far focused on money transfer within India: Idea Cellular and Money On Mobile in particular. Cross-border money transfer and payments is a much larger opportunity for Paytm, and when that happens, its battle with Paypal won’t just be about (allegedly) copying a logo.
That said, all platforms are gradually expanding into the payments/money transfer/wallet space, and while there is a regulatory hurdle for a Google Wallet, Venmo and Square Cash to cross in India, Paytm probably will want to explore adding to its scale by expanding into unregulated or lightly regulated markets. With a 55 member team in Toronto, the US isn’t very far, is it?
“In the case of differential restrictions such as those placed upon non-bank PPIs (Editor: Wallets are prepaid payment instruments, of which Wallets are a kind) with regard to inward remittances, the Committee believes that the problem may be resolved by creating a new limited Authorised Dealer license for non-bank players only for inward remittance purposes. This can be done by RBI through regulations under Section 10 of the Foreign Exchange Management Act, 1999. This will allow non-bank players to act as Indian agents under the MTSS and issue PPIs to approved Overseas Agents. RBI and Member H.R. Khan have expressed their reservations against this approach,52 and indicated that it may not be necessary to provide a limited Authorised Dealer (AD) status to non-bank PPIs since transactions at the agent level would be in Indian Rupee (INR). The Committee notes that while it may not be necessary to provide a limited AD status to non-bank PPIs for them to receive inward remittances, a limited AD license would ensure that non-bank PPIs do not have to depend upon banks for their remittance operations. This would ensure a level playing field and regulatory parity for bank and non-bank PPIs.”