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HomeNewsPhonePe’s acquisition of ZestMoney could spell trouble for Paytm

PhonePe’s acquisition of ZestMoney could spell trouble for Paytm

Digital payments and financial services provider PhonePe is close to acquiring buy-now-pay-later fintech startup ZestMoney. The deal amount is pegged at $200 million-$300 million, and ZestMoney will continue to operate as a separate entity with Zest brand. PhonePe simply needs the RBI’s nod, and it will add the biggest UPI user base, $1 billion in fresh capital, and an NBFC license to its kitty.

PhonePe, owned by Walmart, already has an array of licences, including stockbroking and selling financial products in the bag. If this acquisition goes through, the NBFC licence it will acquire will doubtlessly put archrival Paytm on the backfoot, since the latter cannot expand its business because of regulatory hassles.

With Indian consumers open to digital lending, this opens a lot of interesting possibilities, and allows companies to apply data analysis capabilities to fine-tune and drive the lending process. Time will tell how Paytm counters this move if it goes through.

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