The Perfect Partnership? India’s Paytm and Alibaba’s cloud computing arm enter into a commercial agreement

Written by Rishi Nagar || 30 Jan 2016

Many commercial partnerships result in a broader pool of knowledge, increased resources and the prospect for rapid market growth. This is certainly the case for India’s largest payment startup Paytm and Alibaba’s cloud computing division Aliyun who have just signed an agreement that should be a tremendous opportunity for both companies.

The largest potential for growth in the partnership lies with cross border payments. Chinese shoppers purchasing goods from Indian merchants will be able to use Alipay to pay, and similarly, Paytm users will be able to shop at any merchant that accepts Alipay across China, Japan, the US and the UK. The integration between the platforms marks the start of a very promising opportunity as Alipay will be able to capitalise on India’s domestic customer base, while Paytm will gain exposure to Alipay’s existing merchant base.

The technology behind the partnership is Alibaba’s Aliyun cloud platform. The details regarding the types of data to be stored on the Aliyun servers are not yet known, but expectations are that Paytm will keep its financial data centralised within India’s borders at its own data centres in Delhi and Mumbai. AliCloud’s data analytics, customer insight analysis and fraud detection systems will likely prove beneficial for the Paytm platform and ensure it remains competitive in a global market place saturated with payment options.

With more than 120 million wallets, 100,000 merchants and an average of 75 million orders per month for Paytm, the numbers speak for themselves; Paytm’s CEO claims that today in India, more transactions are completed using Paytm than using a credit card. With these impressive statistics, additional growth expected and a close relationship with Alipay, Paytm has a lot going for it. Once Paytm eventually establishes its own payment bank, we will likely see Paytm continue to run more efficiently and quickly over multiple regions with Aliyun on the back end ensuring transactions are processed in the most effective way possible. This marks an exciting period for the two platforms.

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