Bengaluru, 09 February 2024 – As Paytm grapples with regulatory challenges impacting its payments business, reports indicate that the fintech giant is finalizing an acquisition deal with Bitsila, an interoperable e-commerce startup. Bitsila, the third-largest seller-side platform by transactions on the Open Network for Digital Commerce (ONDC), is expected to close the deal in the coming week.
The News:
Founded in 2020 by Dasharatham Bitla and Sooryah Pokkali, Bitsila serves as a B2B seller-side app, facilitating the onboarding of small merchants to the ONDC network. While the deal size and structure remain unconfirmed, Paytm’s acquisition aims to bolster its presence within the ONDC. The move aligns with Paytm’s strategy to broaden its ONDC engagement, having already integrated as a buyer app in 2022.
The regulatory scrutiny on Paytm, enforced by the Reserve Bank of India (RBI), pertains to concerns ranging from foreign exchange violations to lapses in know-your-customer (KYC) protocols. The RBI’s probe revealed major irregularities in KYC processes, exposing customers, depositors, and wallet holders to significant risks. Paytm’s stock experienced a 10% decline, closing at Rs 447 per share on Thursday.
Paytm’s commitment to ONDC includes plans to onboard 10 million of its merchants by the end of 2025. Vijay Shekhar Sharma, Paytm’s founder and CEO, highlighted the significance of ONDC in expanding the e-commerce landscape and breaking down transaction elements, such as seller, logistics, and payment, to create opportunities for various players.
In January, ONDC surpassed 3 million retail purchases, averaging over 100,000 transactions per day. Additionally, the network achieved 3.5 million mobility bookings, contributing to a total of over 6.5 million transactions across categories. This growth signifies ONDC’s increasing influence in the e-commerce sector, making it an attractive platform for players like Paytm.
The acquisition of Bitsila positions Paytm to leverage the startup’s established seller-side app, providing a tested solution to navigate the evolving ONDC ecosystem.
Some Discoveries About Paytm
- Paytm Payments Bank Market Share in India: Detailed Analysis
- Indian Startup Founders Urge Government Intervention in Paytm Sanctions
- Despite a 40% drop in share value, Morgan Stanley has acquired a 0.8% stake in Paytm for Rs 244 crore.
- Why RBI Bans Paytm Payments Bank?
Conclusion:
The imminent acquisition of Bengaluru-based startup Bitsila holds strategic significance for Paytm, especially amid the regulatory challenges surrounding its payments business. As Paytm faces scrutiny from the Reserve Bank of India (RBI), the acquisition positions the fintech giant to strengthen its foothold within the Open Network for Digital Commerce (ONDC). Bitsila, being the third-largest seller-side platform on ONDC, brings a tried and tested B2B seller-side app to Paytm’s portfolio.
This move aligns with Paytm’s commitment to ONDC, where it aims to onboard 10 million merchants by the end of 2025. By acquiring Bitsila, Paytm gains a valuable asset to navigate ONDC’s evolving ecosystem and enhance its capabilities as both a buyer and seller app. The tested solution from Bitsila offers Paytm a seamless integration into ONDC’s framework, allowing the fintech giant to leverage the platform’s potential and expand its reach within the e-commerce landscape.
In essence, the acquisition of Bitsila serves as a strategic manoeuvre for Paytm, providing a practical solution to regulatory challenges while fortifying its position in the dynamic and rapidly growing ONDC space.