ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Finance

Google disputes drive Indian companies to new Paytm platform

'Atrocious' fees lead Ola and others to mini app store alternative

More than 5,000 app developers have expressed interest in joining Paytm's new platform and over 300 companies have already launched mini programs on it.

BANGALORE -- Indian companies have rallied to join a new "mini app" platform launched by digital payments platform Paytm amid disputes between the country's internet service companies and Google.

More than 5,000 app developers have expressed interest in joining Paytm's new platform since it opened on Oct. 5 and over 300 companies, including ride hailing operator Ola, matchmaking service Matrimony.com and leading online health care services app 1mg, have already launched mini programs with Paytm.

"Our country is at the cusp of a massive digital revolution and we aim to democratize building apps and publishing," said Shreyas Srinivasan, head of the mini app store for Paytm, which is backed by China's Ant Group, Japan's SoftBank and Warren Buffett's Berkshire Hathaway. "The initial response from developers who have already used the new mini app platform to create or upgrade their digital business speaks for itself."

The launch of the platform comes amid a global showdown between app developers on the one hand and Google and Apple on the other over the 30% fee the two companies demand on transactions made within programs downloaded from their app stores.

Paytm's move to create its own direct connection with Indian mobile phone users was also prompted by the suspension of Paytm from the Google Play Store for one day in September over alleged violations of Google's anti-gambling policies.

"Google has monopolized everything," Matrimony.com Chief Executive Murugavel Janakiraman told Nikkei Asia. "It has controlled the Indian internet. It is atrocious to pay 30% for just their distributorship. Tomorrow they can change the policies and ask for more. We have to fight against Google together."

Ant, which is seeking $35 billion in what would be the world's largest initial public offering ever, is the largest shareholder of Paytm parent One97 Communications. Ant, an affiliate of Alibaba Group Holding, helped pioneer the mini app concept with Alipay, China's biggest online payments service.

The Alipay app now features about 2 million mini apps that allow smartphone users to shop, play games, buy insurance and more without installing other software.

Vijay Shekhar Sharma, founder and chief executive of Paytm, said his company aims to feature 1 million mini apps by next April and had set aside 100 million rupees ($1.36 million) to back developers.

"We are committed to developing a technology ecosystem that champions the innovations of Indian developers," he said. "We are not just back-end developers, Indian developers can build the best apps in the world."

Analysts say that Paytm's mini app store holds particular appeal in India in that many consumers have limited data service plans and memory storage on their phones.

"From the customer point-of-view, this is beneficial in that they need not have many apps in their phone and only one app will serve their purpose which will give them more memory space to use for other stuff. Also, the performance of the phones will be enhanced," said Pavel Naiya, senior analyst for devices and ecosystems at research company Counterpoint Research.

According to data included in Ant's IPO prospectus, One97 generated the equivalent of 1.26 billion yuan ($188.18 million) of revenue in the first half of 2020 and posted a loss of 861.13 million yuan.  

While Paytm, which claims 50 million monthly active users, will hope that most mini app users will also use its payment service, it is allowing mini app providers to offer their customers a range of payment choices and is not collecting any fees from mini programs in its store. The ability to roll out a mini app much faster and cheaper than a full-fledged app is also seen as a draw to get businesses into Paytm's store.

Vishal Gondal, chief executive of health care app GOQii, called Google's moves to enforce its 30% commission rate and ban Paytm "a wake-up call for all the companies in India."

"We along with Paytm have to fight against this," he said. "Google is only in love with profit. 30% is only the tip of the iceberg. They are also taking my data outside India without my permission."

To be sure, GOQii, Matrimony.com and others joining Paytm's mini app store are keeping their full apps in the Google Play Store for now though both Gondal and Janakiraman said they hope that Google's arbitrary control can be reined in or that a full-fledged local app store can get off the ground.

"It is not about me deciding to stay on Google or not, it is about the customers," Gondal said. "If all the customers are on Google, we can't help but go there. They are in a dominating position. It is like there is only one shopping mall in India with Google and every customer is going in that mall."

Amid the outcry in India, Google said last week that it would push back enforcement of its 30% fee on some in-app transactions from 2021 to 2022. Google did not respond to requests for comment on Paytm's mini app store.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more