Mobile payment company Paytm, backed by Chinese payments and ecommerce major Alibaba, is planning to launch a messaging service, reports Reuters. The messaging service will, according to the story, be “embedded in its payments app, and allow users to send audio, video, pictures and texts.
A fairly big deal is being made out of this: the Wall Street Journal has positioned this as Paytm taking aim at Whatsapp. Remember that Whatsapp’s business head Neeraj Arora is on the board of Paytm.
Whatsapp is integrating UPI for payments (allowing transfer of money from bank account to bank account), and this might lead to a shift in P2P payments (and not person to merchant payments) away from Paytm, to Whatsapp. This would then be a defensive move from Paytm.
Also read: What WhatsApp will have to consider before entering the payments biz in India
MediaNama’s take: The hype is unwarranted.
1. Whatsapp is in a different league: Whatsapp is in a different league, with over 200 million monthly active users. Globally, a staggering 76% of Whatsapp’s 1.3 billion monthly active users users are daily active users. Assuming the same ratio for India, Whatsapp would have 152 million daily active users.
Paytm, it is reported, has 225 million users, but these are registered users, and not monthly active users. In the past, Paytm has declined to disclose its monthly active users, whenever MediaNama has enquired.
In the month of March, there were only 241 million mobile wallet transactions across the wallet industry – including other significant payment companies like Mobikwik. It’s unlikely that there are 200 million monthly active users in the digital wallet industry as a whole.
P.s.: don’t be fooled by the accelerated growth between November and January 2017: that growth was inorganic, driven by a (hopefully) once in a lifetime event.
2. A completely different use case: As an activity, digital payments is still in a nascent stage, and hardly as significant a daily use case as messaging (for now). Check the chart above: transactions dipped by transactions dipped by 74.15 million in May 2017.
This is why messaging will have a higher daily active user base. Perhaps this is what Paytm is trying: to increase the number of active users on its app or for its service by incorporating messaging. Paytm will have to do something significant to get people to message each other and remain active on an app which by itself doesn’t have a daily use case in India, for now. I don’t know: maybe Rs 100 cashback to a Paytm wallet every time a user sends 1000 messages. That would be very ibibo of them.
(Yes, I used to write about this stuff in 2006. A line from that post still rings true: “Doling out Rs.1.5 crore wont buy you loyalty”)
3. Simpler use case should win this: Whatsapp has a single use case: messaging. All other use cases that they’ve added are essentially a function of this. The idea behind adding P2P interactions is to increase give users something else to do with the app. Unlike WeChat, which has brand channels, payments and e-commerce, Whatsapp has kept it simple.
If Paytm integrates messaging with its existing application, users will have to find messaging in an interface already full of other things to do.
Remember Flipkart’s attempt at messaging within their shopping app with Ping? Yeah, I don’t either. They probably don’t want to remember it.
Facebook realised that it’s better to integrate services in a messaging app than messaging in a content app, and carved out Messenger into a separate application. Now it is focused on adding other services in that application, whether it is bots or payments.
Paytm is probably better off launching a separate messaging app, and hoping that its messenger has more daily active users in India than Google Allo.
4. Paytm missed a chance earlier: Remember that Paytm acquired a messaging application Plustxt in August 2013. Scroll up and see that Whatsapp chart again, for August 2013.
Paytm had an opportunity to get into messaging, with a messenger with Indian language capabilities – something that Whatsapp, I guess, it didn’t have at that time. Now it has multiple Indian languages. Of course, this missed opportunity is not something that one can hold against Paytm: they picked ecommerce as their focus, then payments, and in 2015, raised their first large funding from Alibaba Group co Ant Financial, and became what appears to be the largest consumer focused payments business in India.
