Sunday, October 24, 2021

Paytm IPO reveals Gen Z’s vision of banking

Investors will bet on Paytm and its upcoming $2.2 billion stock sale.
As for what it might be, look at Korea.


Internet-based businesses are raising funds at record speeds, harnessing the pandemic’s momentum for all things digital. Exposure to South Korean new-age virtual bank or Indian fintech company allows global investors to avoid Beijing’s regulatory actions.



When young tenants rent apartments through the Internet loan KakaoBank, known as “jeonse” in South Korea, they do not have to go to the branch because the branch does not exist. Since 90% of the population uses KakaoTalk, Facetoface contacts rarely provide additional information to lenders.
Compared to traditional lenders, this is a great advantage.


In India, Paytm-short for “payment via mobile”-has its origins. It is a tool for people to recharge prepaid phone bills and pay for Uber rides. The platform paid merchants 4 trillion rupees ($54 billion) last year, similar to Kakao Pay’s 67 trillion won ($58 billion).


Even so, Indians still clearly see some value in their Paytm payment bank accounts. Its market share last month was higher than that of the State Bank of India, the country’s largest bank. As the largest issuer of automotive electronic payment toll tags, Paytm’s performance in initiating transactions is not bad.


Now, if Paytm has an unrestricted banking license, it can theoretically challenge traditional lenders like KakaoBank in South Korea.
Compared to when Paytm ruled five years ago, the digital wallet business has become more competitive. Wal-Mart’s PhonePe and Alphabet’s Google Pay wallets processed US$35 billion and US$28 billion in transactions last month, respectively. But it is accepted by small shop owners, even in small towns.

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