Google and Walmart’s PhonePe establish dominance in India’s mobile payments market as WhatsApp Pay struggles to launch

In India, it’s Google and Walmart-owned PhonePe that are racing neck-and-neck to be the top player in the mobile payments market, while Facebook remains mired in a regulatory maze for WhatsApp Pay’s rollout.

In May, more than 75 million users transacted on Google Pay app, ahead of Walmart-owned PhonePe’s 60 million users, and SoftBank-backed Paytm’s 30 million users, people familiar with the companies’ figures told TechCrunch.

Google still lags Paytm’s reach with merchants, but the Android-maker has maintained its overall lead in recent months despite every player losing momentum due to one of the most stringent lockdowns globally in place in India. Google declined to comment.

Paytm, once the dominant player in India, has been struggling to sustain its user base for nearly two years. The company had about 60 million transacting users in January last year, said people familiar with the matter.

Data sets consider transacting users to be those who have made at least one payment through the app in a month. It’s a coveted metric and is different from the much more popular monthly active users, or MAU, that various firms use to share their performance. A portion of those labeled as monthly active users do not make any transaction on the app.

India’s homegrown payment firm, Paytm, has struggled to grow in recent years in part because of a mandate by India’s central bank to mobile wallet firms — the middlemen between users and banks — to perform know-your-client (KYC) verification of users, which created confusion among many, some of the people said. These woes come despite the firm’s fundraising success, which amounts to more than $3 billion.

In a statement, a Paytm spokesperson said, “When it comes to mobile wallets one has to remember the fact that Paytm was the company that set up the infrastructure to do KYC and has been able to complete over 100 million KYCs by physically meeting customers.”

Paytm has long benefited from integration with popular services such as Uber, and food delivery startups Swiggy and Zomato, but fewer than 10 million of Paytm’s monthly transacting users have relied on this feature in recent months.

Two executives, who like everyone else spoke on the condition of anonymity because of fear of retribution, also said that Paytm resisted the idea of adopting Unified Payments Interface. That’s the nearly two-year-old payments infrastructure built and backed by a collation of banks in India that enables money to be sent directly between accounts at different banks and eliminates the need for a separate mobile wallet.

Paytm’s delays in adopting the standard left room for Google and PhonePe, another early adopter of UPI, to seize the opportunity.

Paytm, which adopted UPI a year after Google and PhonePe, refuted the characterization that it resisted joining UPI ecosystem.

“We are the company that cherishes innovation and technology that can transform the lives of millions. We understand the importance of financial technology and for this very reason, we have always been the champion and supporter of UPI. We, however, launched it on Paytm later than our peers because it took a little longer for us to get the approval to start UPI based services,“ a spokesperson said.

A sign for Paytm online payment method, operated by One97 Communications Ltd., is displayed at a street stall selling accessories in Bengaluru, India, on Saturday, Feb. 4, 2017. Photographer: Dhiraj Singh/Bloomberg via Getty Images

Missing from the fray is Facebook, which counts India as its biggest market by user count. The company began talks with banks to enter India’s mobile payments market, estimated to reach $1 trillion by 2023 (according to Credit Suisse), through WhatsApp as early as 2017. WhatsApp is the most popular smartphone app in India with over 400 million users in the country.

Facebook launched WhatsApp Pay to a million users in the following year, but has been locked in a regulatory battle since to expand the payments service to the rest of its users. Facebook chief executive Mark Zuckerberg said WhatsApp Pay would roll out nationwide by end of last year, but the firm is yet to secure all approvals — and new challenges keep cropping up. WhatsApp declined to comment.

PhonePe, which was conceived only a year before WhatsApp set eyes to India’s mobile payments, has consistently grown as it added several third-party services. These include leading food and grocery delivery services Swiggy and Grofers, ride-hailing giant Ola, ticketing and staying players Ixigo and Oyo Hotels, in a so-called super app strategy. In November, about 63 million users were active on PhonePe, 45 million of whom transacted through the app.

Karthik Raghupathy, the head of business at PhonePe, confirmed the company’s transacting users to TechCrunch.

Three factors contributed to the growth of PhonePe, he said in an interview. “The rise of smartphones and mobile data adoption in recent years; early adoption to UPI at a time when most mobile payments firms in India were betting on virtual mobile-wallet model; and taking an open-ecosystem approach,” he said.

“We opened our consumer base to all our merchant partners very early on. Our philosophy was that we would not enter categories such as online ticketing for movies and travel, and instead work with market leaders on those fronts,” he explained.

“We also went to the market with a completely open, interoperable QR code that enabled merchants and businesses to use just one QR code to accept payments from any app — not just ours. Prior to this, you would see a neighborhood store maintain several QR codes to support a number of payment apps. Over the years, our approach has become the industry norm,” he said, adding that PhonePe has been similarly open to other wallets and payments options as well.

But despite the growth and its open approach, PhonePe has still struggled to win the confidence of investors in recent quarters. Stoking investors’ fears is the lack of a clear business model for mobile payments firms in India.

PhonePe executives held talks to raise capital last year that would have valued it at $8 billion, but the negotiations fell apart. Similar talks early this year, which would have valued PhonePe at $3 billion, which hasn’t been previously reported, also fell apart, three people familiar with the matter said. Raghupathy and a PhonePe spokesperson declined to comment on the company’s fundraising plans.

For now, Walmart has agreed to continue to bankroll the payments app, which became part of the retail group with Flipkart acquisition in 2018.

As UPI gained inroads in the market, banks have done away with any promotional incentives to mobile payments players, one of their only revenue sources.

At an event in Bangalore late last year, Sajith Sivanandan, managing director and business head of Google Pay and Next Billion User Initiatives, said current local rules have forced Google Pay to operate without a clear business model in India.

Coronavirus takes its toll on payments companies

The coronavirus pandemic that prompted New Delhi to order a nationwide lockdown in late March preceded a significant, but predictable, drop in mobile payments usage in the following weeks. But while Paytm continues to struggle in bouncing back, PhonePe and Google Pay have fully recovered as India eased some restrictions.

About 120 million UPI transactions occurred on Paytm in the month of May, down from 127 million in April and 186 million in March, according to data compiled by NPCI, the body that oversees UPI, and obtained by TechCrunch. (Paytm maintains a mobile wallet business, which contributes to its overall transacting users.)

Google Pay, which only supports UPI payments, facilitated 540 million transactions in May, up from 434 million in April and 515 million in March. PhonePe’s 454 million March figure slid to 368 million in April, but it turned the corner, with 460 million transactions last month. An NPCI spokesperson did not respond to a request for comment.

PhonePe and Google Pay together accounted for about 83% of all UPI transactions in India last month.

Industry executives working at rival firms said it would be a mistake to dismiss Paytm, the one-time leader of the mobile payments market in India.

Paytm has cut its marketing expenses and aggressively chased merchants in recent quarters. Earlier this year, it unveiled a range of gadgets, including a device that displays QR check-out codes that comes with a calculator and USB charger, a jukebox that provides voice confirmations of transactions and services to streamline inventory management for merchants.

Merchants who use these devices pay a recurring fee to Paytm, Vijay Shekhar Sharma, co-founder and chief executive of the firm told TechCrunch in an interview earlier this year. Paytm has also entered several businesses, such as movie and travel ticketing, lending, games and e-commerce, and set up a digital payments bank over the years.

“Everyone knows Paytm. Paytm is synonymous with digital payments in India. And outside, there’s a perceived notion that it’s truly the Alipay of India,” an executive at a rival firm said.

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Robotics startup lets machines get closer as humans keep their distance

Kyle S. Gibson Contributor

Kyle S. Gibson is a writer and videographer in Boston, currently focused on robotics and industrial internet of things. Kyle has worked for publishers AmericanInno and MIT Technology Review, sales automation developer Pegasystems, and blockchain strategy group New Alchemy. He is currently writing for MIT Horizon, an emerging technology education platform. His work is supported by a regional awareness initiative of the New England Venture Capital Association.

As humans get used to working at a distance from each other, a startup in Massachusetts is providing sensors that bring industrial robots in close —  centimeters away, in fact. The same technology may support future social distancing efforts on commutes, in a pilot application to allow more subway trains to run on a single track.

Humatics, an MIT spinout backed by Lockheed Martin and Airbus, makes sensors that enable fast-moving and powerful robots to work alongside humans without accidents. If daily work and personal travel to work ever go back to normal, the company believes the same precision can improve aging and crowded infrastructure, enabling trains and buses to run closer together, even as we all may have to get used to working further apart.

This is the emerging field of microlocation robotics — devices and software that help people and machines navigate collaboratively. Humatics has been testing its technology with New York’s MTA since 2018, and today is tracking five miles of a New York subway, showing the transportation authority where six of its trains are, down to the centimeter.

Image Credits: Humatics (opens in a new window)

UWB sensors for microlocation

Humatics’ technology in the MTA pilot uses ultrawide band (UWB) radio frequencies, which are less failure-prone than Wi-Fi, GPS and cameras.

“A good example of a harsh environment is a subway tunnel,” said David Mindell, co-founder of Humatics and professor of engineering and aerospace at MIT. “They are full of dust, the temperatures can range from subzero to 100 degrees, and there is the risk of animals or people tampering with devices. Working inside these tunnels is difficult and potentially dangerous for crews, also.”

Humatics has sold more than 10,000 UWB radio beacons, the base unit for their real-time tracking system, to manufacturers of sensor systems, the company says. They pinpoint the location of hundreds of RFID tags at a range of 500 meters, using multiple tags on an object to measure orientation.

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Apple Card debuts a $50 sign-up bonus in partnership with Walgreens

Apple’s rewards-based credit card, Apple Card, is offering its first sign-up bonus in partnership with Walgreens. On Monday, June 1, Apple and Walgreens introduced a new offer that will pay consumers $50 in Daily Cash when they get a new Apple Card and spend $50 or more at Walgreens within their first 30 days of being a cardholder.

The limited-time offer is detailed on Apple’s website and can be found in the Walgreens app on iOS at the bottom of its Weekly Ad & Coupons page. Customers have until June 30, 2020 to apply before the offer expires.

Walgreens already had a close relationship with Apple, as the retailer joined Uber last fall to become one of the few offering 3% Daily Cash back on purchases made using Apple Card. Currently, retailers including  Walgreens/Duane Reade, Uber/Uber Eats, T-Mobile, Nike, and Apple participate in the more limited 3% Daily Cash program. Most other Apple Card purchases offer either 2% or 1% back, the former if Apple Pay is used and the latter if Apple Pay isn’t an option.

This Daily Cash can then be used to make purchases using Apple Pay, sent to family or friends via iMessage, or used to pay down your Apple Card balance.

In addition to the 3% back Walgreens and Duane Reade shoppers get when using Apple Pay, customers will now also receive 3% back when they pay using their titanium Apple Card at the Walgreens drive-thru from now through July 31.

Most rewards-based credit cards today give consumers the opportunity to earn a sign-up bonus. Some no-annual-fee credit cards do, as well. But so far, Apple Card hadn’t offered any sort of sign-up bonus to customers, noted CreditCards.com in its review of the new offer. That said, Apple’s sign-up bonus is fairly small in comparison with rivals, the site said. For example, Amex’s Blue Cash Everyday Card and the Capital One Quicksilver Cash Rewards Credit Card both provide a $150 statement credit when conditions are met.

“This sign-up bonus is a first for the Apple Card, but it’s definitely a sign of the times,” remarked Sara Rathner, credit cards expert at NerdWallet. “Credit card companies are making changes across the board to attract and retain customers at a time when spending habits are dramatically different than they were even three months ago. This $50 credit for spending at Walgreens could be a way for the Apple Card to test how responsive consumers are to these types of deals,” she said.

The Apple Card comes with other advantages which makes it appealing to consumers, however. The card doesn’t have any fees and promises its issuing bank, Goldman Sachs, won’t sell or share your data to third parties. That’s made the Apple Card a top choice for customers who want the advantages of using a credit card, while still protecting their privacy.

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Wearable growth slowed — but not stopped — by pandemic

Growth in the wearable sector has taken a hit due to the COVID-19 pandemic. Compared to other hardware categories like smartphones and PCs, however, the space actually fared reasonable well. According to new projections from ABI Research, device shipments are expected to be up 5% year-over-year in 2020.

Global PC shipments set to drop 7% in 2020

That single digit growth is, however, significantly less than the 17% predicted for the year — not to mention the 23% it saw between 2018 and 2019. Manufacturers are now expected to ship 254 million devices in 2020, up from last year’s 241 million. The biggest change in the first quarter is that people simply weren’t buying non-essentials. Here in the States, the pandemic has had a knock-on effect of some 40 million unemployment claims.

Anecdotally, I expect there’s also less interest in purchase things like fitness trackers in a time when people are being actively discouraged from leaving the how — not to mention the fact that all of the gyms have temporarily closed. There’s something existentially troubling in seeing that you’ve only hit 3% of your step count each day. That said, a potential slide has been hampered by increased interest in tracking one’s own personal health.

An already struggling smartphone market takes a big hit from COVID-19

“The COVID-19 pandemic has brought a higher health awareness to all individuals around the world,” says ABI’s Stephanie Tomsett. “Wearables with advanced health monitoring features will begin to buoy the wearables market in the second half of 2020 and pave the way for 289 million wearable shipments by 2021 and 329 million by 2022 as the world recovers from the pandemic.”

Certainly devices like the Apple Watch and Fitbit products are being taken more seriously as healthcare products, courtesy of features like EKG readings and oxygen level readings. Companies have also been working with research groups for COVID-19 studies.

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C4 Ventures raises $88M fund for post-Series A startups, in a post-COVID19 world

C4 Ventures, the Paris-based VC, has raised a new €80 million ($88 million) “Fund II”. The fund was founded by Pascal Cagni, a former Europe boss of Apple, and includes cofounder Raph Crouan, another Apple alumni previously with Startupbootcamp and is currently President of La FrenchTech. C4 is designed to be a “post-Series A” fund and normally invests around €3-4 million euros.

The new fund is described as a “boutique” VC which will focus on tech which will thrive in “post-Covid” world. Recruited by the late Steve Jobs, Cagni started the fund within months of leaving Apple, but the firm didn’t become significant until 2014. Outside of business, Cagni is an “ally” to President Emmanuel Macron and has worked on several initiatives to boost France’s technology and entrepreneurship sectors.

Cagni, who was head of Apple in Europe from 2000 to 2012, said: “Having witnessed first-hand technology’s unique power to drive real-time behavioral change, we believe that, although Covid-19 is going to bring about an economic slowdown, it is also going to be a breeding ground for innovation and change through disruptive tech,” said Pascal Cagni. “We felt confident that we should, as planned, raise and deploy capital during this period.”

Fund II has a good head start, having invested in seven companies which will be able to adapt to a Post-Covid world including:

• Zoov, a French electric bike-sharing platform

• DriveNets, a software company adapting the cloud model to networking, allowing consumer service providers to scale up for lower costs.

• Trouva, a European online homeware marketplace helping independent local shops scale their offers online.

C4 has previously invested in include Nest, the smart thermostat company acquired by Google for $3.2 billion, and Graphcore, an AI chip start-up now valued at over $2 billion. But it also put cash into Anki, a consumer robotics company that went bust last year after raising around $200 million.

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Google pulls ‘Remove China Apps’ from Play Store

Remove China Apps, an app that gained popularity in India in recent weeks and did exactly what its name suggests, has been pulled from the Play Store.

The top trending app in India, which was downloaded more than 5 million times since late May and enabled users to detect and easily delete apps developed by Chinese firms, was pulled from Android’s marquee app store for violating Google Play Store’s Deceptive Behaviour Policy, TechCrunch has learned.

Under this policy an app on Google Play Store cannot make changes to a user’s device settings, or features outside of the app without the user’s knowledge and consent, and not it can encourage or incentivize users into removing or disabling third-party apps.

The app, developed by Indian firm OneTouch AppLabs, gained popularity in India in part because of a growing anti-China sentiment among many citizens as tension between the world’s two most populous nations has escalated in recent days over a Himalayan border dispute.

Several Indian celebrities in recent days have backed the idea of deleting Chinese apps. Yoga guru Baba Ramdev tweeted a video over the weekend that showed him deleting several apps that had affiliation with China.

Responding to a tweet from an Indian actor deleting TikTok from his phone, Nupur Sharma, a spokeswoman for India’s ruling party BJP, said it was “great to see concerned citizens setting an example” and “we ought to hit them where it hurts most.”

Citing an industry source, Chinese state-run Global Times news outlet reported on Tuesday that if the Indian government allows the “irrational anti-China sentiment” to continue it risks ruining bilateral relations that is “likely to draw tit-for-tat punishment from Beijing.”

The report added that some users in China ridiculed Remove China Apps and urged Indians to “throw away” their smartphones, referring to Chinese smartphone makers’ dominance in India’s smartphone market.

If the sentiment from India persists, it could mean bad news for several Chinese firms such as ByteDance and UC Browser that count India as their biggest overseas market. TikTok, which weeks ago was grappling with content moderation efforts in India, sparked a new debate over the weekend after a popular creator claimed that a video she posted on TikTok was pulled by the Chinese firm.

The video was critical of the Chinese government, she said. In a statement to TechCrunch, a TikTok spokesperson said the platform welcomes diversity of users and viewpoints and said it had implemented a more rigorous review process and reinstated the video.

In April, India amended its foreign direct investment policy to enforce tougher scrutiny on Chinese investors looking to cut checks to firms in the world’s second largest internet market. New Delhi, which maintains a similar stand for investors from several other neighboring nations, said the measure was introduced to “curb the opportunistic takeover” of Indian firms going through distress because of the global pandemic.

India’s Prime Minister Modi has also aggressively promoted the idea of boycotting goods made by foreign firms and advised the nation’s 1.3 billion citizens to look for local alternatives as part of his push to make India “self-reliant” and revive the slowing economy.

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Apple further expands into original podcasts with launch of ‘The Zane Lowe Interview Series’

Apple has quietly expanded its original podcast efforts with Friday’s launch of The Zane Lowe Interview Series, available on Apple Music and via RSS. Though technically not Apple’s first-ever podcast, the new series is the first series aimed at Apple’s consumers that focuses exclusively on entertainment content. The episodes in the series will feature Apple’s Global Creative Director, Zane Lowe, in conversations with leading artists like Billie Eilish, Justin Bieber, Kanye West, Hayley Williams, and, most recently, Lady Gaga.

Apple Music has published podcasts before, but not of this nature.

The company today uses its platform to distribute its corporate news, such as the Apple Keynotes podcast, Apple Quarterly Earnings Call, and Events at the Apple Store. While the latter is aimed at consumers, it’s an entirely different genre of programming. Its focus is Apple’s retail events, which may include big-name celebs at times, but whose larger purpose is tied to bringing in customers to Apple stores and showing off how Apple’s devices and software are used in the creation of art, music, photography, and movies.

Last year, the Apple Music team also experimented with the podcasting medium to distribute its 2019 Grammy’s Celebration which had first streamed live on Beats 1 that February.

The Zane Lowe Interview Series, however, is less of a one-off.

Apple says that new episodes will debut on Apple Music on a regular basis. However, there isn’t a set schedule for the release of new episodes, as with many other podcasts. Some weeks, Lowe may interview as many as four artists, and, the next week, he may interview none. While the conversations won’t necessarily be tied to new album releases, they are a big driver.

Hey I’m excited to share that I now have a new Podcast series where these conversations will live ongoing. You can hear my latest with ⁦⁦@ladygaga⁩ alongside others right now on ⁦@ApplePodcasts⁩ https://t.co/2wEeuWfTtH

— Zane Lowe (@zanelowe) May 29, 2020

The series launched on Friday and was followed by an in-depth profile of Zane Lowe by The New York Times.

Already, there are over a half-dozen episodes available, including the new Lady Gaga interview recorded ahead of the release of Chromatica; an interview with Paramore’s Hayley Williams ahead of her first solo album; one with Justin Bieber to mark his release of Changes; a two-parter interview with Kanye West recorded on the eve of the release of his ninth solo project, Jesus is King; an interview with Selena Gomez on the making of her third album, Rare; and one with Billie Eilish, detailing When We All Fall Asleep, Where Do We Go?

Apple’s launch of the original podcast series follows rival Spotify’s significant investment in podcasts in recent years, including Spotify’s acquisition of startups making podcasting tools, like Anchor, as well as acquisitions of podcast networks, like Gimlet and The Ringer, totaling $400 million. As a result, Spotify now offers its subscribers access to hundreds of original and exclusive podcasts including, as of last month, one of the most popular podcasts to date: The Joe Rogan Experience.

Apple’s efforts, meanwhile, have been minimal to date. Besides its 2019 experiment with the Grammy’s content and Apple’s various corporate series, the company had yet to launch other consumer-facing podcasts. Bloomberg reported in January Apple was looking into making original podcasts to promote its Apple TV+ shows, but nothing on that front has yet to arrive.

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