Companies rally with Alibaba-backed Paytm app platform amid disputes with Google

Kapil Kajal | Oct 7, 2020 | 5 min read

art

India's digital payments platform Paytm on October 5 announced the launch of its Android Mini App Store to support Indian developers and take their products to the masses. The launch came after Google temporarily removed Paytm from the Google Play store for breaching their gambling policy on September 18. 

Vijay Shekhar Sharma, Founder and CEO of Paytm, stated that through this initiative, India would be able to build a sustainable and thriving local technology ecosystem that resonates with the true spirit of self-reliant India. “Growing technological companies will get the opportunity to rely on India’s Paytm to contribute towards the overall growth of the Indian economy and create employment,” he added. 

The move is seen as a direct fallout on the monopoly of Google that mandated developers listed on the Google Play store to use its billing service from January 2021. The industry body Internet and Mobile Association of India (IAMAI) criticised Google for making it compulsory for developers to use Google Play’s billing system as the only method of payment. In a note on September 29, IAMAI said, “Google’s announcement even if legal is certainly not innocuous.” 

Vishwas Patel, Founder of CCAvenues and Chairman of Payments Council Of India, stated, “Just because Google owns the gateway to the digital ecosystem of this country, they should not act arbitrarily and enforce their rules and regulations which are contrary to our country’s laws. Also, they cannot force Indian app developers/owners selling digital services to compulsorily use the Google billing and payment system and charge 30% as merchant discount rate. They should not reject Indian apps who are using payment aggregators and gateways recognised by India’s central bank, the Reserve Bank of India (RBI).” 

He added, “Google’s stance in courts is that it does not need RBI authorisation as it’s not a payment system operator and here it is mandating that Indian apps use only Google’s proprietary billing and payment systems. Google should not exercise its dominant position, rather allow a level-playing field for everyone in the ecosystem.”

Paytm, which claims to have over 50 million monthly active users, came up with its own app store days after a coalition with more than 50 Indian startups, including Zomato, MakeMyTrip and RazorPay, came together to protest against Google’s policy of levying a 30% fee on in-app purchases, which is also seen as a timely move as startups can use Paytm's distribution network for free.

Narendra Singh Yadav, vice president, Paytm, told Nikkei Asia that Paytm is providing the listing and distribution of these mini-apps within its app without any charges. For payments, developers will have the choice to provide Paytm Wallet, Paytm Payments Bank, UPI, net-banking and debit/credit cards to their users, he said. 

He added that the mini-app store is not a replacement to Google Play store but is a custom-built mobile website that gives users app-like experience without having to download them, which would greatly benefit millions of citizens to save their limited data and phone memory. “Paytm has created the digital infrastructure to enable small developers and businesses to set up low-cost, quick-to-build mini-apps which can be built using HTML and javascript technologies,” Yadav said.

More than 300 app-based service providers such as Decathalon, Ola, Park+, Rapido, NetMeds, 1MG, Domino's Pizza, FreshMenu and NoBroker have already joined the programme. Meanwhile, amid the protest of companies and Paytm mini-app store launch, Google has delayed levying its billing service to April 2022. Deepak Shenoy, Founder of Capital Mind, a financial consulting firm, said that this is a good move by startups in India to set up an alternative app store. He added, “By the time Google levies its billing services, I hope the crowd brings in a competitive player in the app-store space.”   

Pavel Naiya, Senior Analyst, Devices and Ecosystem, Counterpoint Research (an industry analysis firm), told Nikkei Asia that the current offerings in the Paytm mini-app store don’t directly compete with the Google Play store, but it’s providing different ways of application format, which means that you can go to the app and access other websites. 

“Other than that, strategically, Paytm Mini App Store is in the line with what we have already seen in southeast Asia, especially in China, where there is a concept of a super app which means that one app becomes so big that other apps start using it as a platform and other services on the top of it. We can see the example of WeChat. I think in India, Paytm is trying to create something on the similar grounds,” he said. 

Naiya added that it comes in the middle of Google controversy and the Government of India also announced that they have been looking to have an Indian platform, so looking at the reach and investment that Paytm has, they always try to bring a platform where they can serve more than one product and it’s perfectly set in that context. 

“From the customer point-of-view, this is also beneficial that they need not have many apps in their phone and only one app will sort their purpose which will give them more memory space to use for other stuff and also the performance of the phones will be enhanced,” Naiya explained.

More stories published under

Business