According to a report by The Economic Times of India, Microsoft (NASDAQ: MSFT) is expected to lead a $ 100 million funding round in India’s digital payment behemoth- Paytm.
Paytm provides digital payment services to individuals and merchants and has raised around $ 3.5 billion so far. Paytm is one of India’s largest digital payment platforms, backed by investors including SAIF Partners, SoftBank and Alibaba Group.
Paytm became extremely popular in 2016 after India’s demonetization efforts. India was primarily a cash-based economy that had to temporarily transition to a digital-based economy overnight, resulting in an increase in online payment service providers.
Since then, however, several players have threatened Paytm’s leadership position, including Alphabet’s Google Pay and Walmart-backed PhonePay.
India’s mobile payment industry is expected to grow at an annual rate of 22% between 2018 and 2025 and reach $ 1.26 trillion by the end of the forecast period.
The capacity of India’s tier two cities and rural areas is still untapped. Paytm aims to invest more than $ 1.3 billion in these geographies over the next three years to expand its market presence.
Technology companies like Microsoft want to invest in India’s growing digital payments market to capture their share of potential growth coming from the subcontinent.