India's Paytm crackdown spooks retailers; Walmart, Google swoop in

India’s Paytm is mobilising its sales team to reassure merchants just as Walmart and Google are targeting those same vendors.

Hit by a regulatory crackdown, India's Paytm is mobilising its sales team to reassure the merchants who use its app to accept digital payments just as Walmart and Google are targeting those same vendors with their rival offerings.

Cash was once king in India, but Paytm is credited with revolutionising India's digital payments market which is set to be worth $10 trillion by 2026. Backed by SoftBank, and earlier by billionaire investor Warren Buffett and China's Alibaba, it has 100 million monthly users and clocked $61 billion worth of merchant payments between October and December.

But many merchants are now refusing to deal with Paytm after India's central bank last week asked its banking unit - which mainly powers the popular payments app - to cease most operations from March 1 for "persistent non-compliance".

In the southern Telangana state, around 2,000 shops have put signs saying "No Paytm, Pay Cash", and some have even covered up the Paytm QR code which customers scan for payments, said Mohammed Salahuddin, a member of a local retailers association.

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"I have decided to avoid using Paytm. Customers have to give cash," he said.

To counter such concerns, the company is sending sales staff directly to customers ranging from roadside snack sellers to big retail outlets to ask them to use Paytm's partner banks so that they can continue to receive payments, more than 40 shopkeepers and several company sales staff said.