The publication said SoftBank plans to invest $400 million in the company, while Alibaba will provide $45 million. Combined, the funding will value Paytm at about $1.9 billion. SoftBank is particularly interested in Paytm Mall, the brand name of Paytm’s online marketplace.
“We believe Paytm Mall’s offline-to-online operating model, combined with the strength of the Paytm ecosystem, is uniquely positioned to enable India’s 15 million offline retail shops to participate in India’s eCommerce boom,” said SoftBank in a statement.
The investment was announced the same day separate reports said Paytm is looking to diversify its offerings and focus on bank-to-bank transfers, as the company expects enhanced Know Your Customer (KYC) rules will put pressure on transaction volume.
According to The Times of India, the Reserve Bank of India imposed KYC rules on peer-to-peer and merchant payments that came into effect last month.
Before these rules, eWallet customers only needed a mobile number and a payment account to use a solution to send and receive cash, add funds and use other services. Enhanced KYC requirements mean customers will have to complete a more detailed authentication process.
In response, Paytm said it will be focusing on bank-to-bank transfers using an intermediary service like Payment Service or IMPS, according to the publication.
In addition, the company is said to be exploring an entrance into supplier payments, wholesale payments and gig worker and freelance payments.
“We have been working on becoming a full-stack payments player,” said Paytm COO Kiran Vasireddy, according to the publication. “The focus on money transfer clearly shows we want people to make transactions on our platform using whichever solution they like. Our offline payments have also scaled through the Paytm QR code feature, enabling merchants to accept payments directly into their bank accounts.”