I have always suspected the beefed up valuations of payment apps in India related to lack of regulations in place for use data protection and privacy. Most of these apps seem to be making money on some sort of data driven business models.

If that is true, the valuations do make sense. If you can provide purchase power metrics for half a billion users, a $7B valuation might start to seem modest.

Yeah. For example, Google pay also needs your location information and access to your contact lists in order to conduct any transaction. Unfortunately, the government (NPCI) owned BHIM app is plagued with all kinds of performance issues, and the transactions often fail. Otherwise, I wouldn't even have considered the Google or Flipkart owned payment apps.

Thanks for this perspective.

I think CRED is also doing the same.

Irony that you're downvoted for staying a very relevant fact. Most of these startups that have raised huge funds are also burning cash like anything. And established startups like Oyo and Zomato are facing backlash from their business partners and couldn't expand to venture into new areas to find profitability.

Profitability is still a very long way for most of these b2c startups

> burning cash like anything Burning to acquire end-user (in terms of number). Not to gain loyalty, that's the sad part.

Zomato is locked to food & restaurants. See Swiggy, they have not locked themselves and expanded to many other Supply chain related businesses

Oyo, is like WeWork :)

The money comes in from businesses who are offered loans based on the transaction volume PhonePe sees. Online businesses that use "Pay with PhonePe" links have to pay commission. In the broad sense, if it scales, it's a pretty decent business.

> Online businesses that use "Pay with PhonePe" links have to pay commission

Can you please share, any relevant or merchant integration link which says about transaction charges.

I don't think there are transactional charges, at least in beginning (I have not digged deep) but saying as per UPI.

UPI service is directly by banks (and government) (transfer from user's bank to merchant's bank without intermediary).

I can understand that very small transaction fees can be levied in future because PhonePe, Gpay may provide more business to these merchants as their user base grows.

Why I am saying very small? Unlike dispute resolution in PayPal kind of platform (which holds money) here it is much difficult to provide similar resolution to end-user, as payment is directly done to merchant.

But. It is B-2-B and B-2-B is mostly driven by trust, loyalty and partnerships, unlike end-users in India who runs after app providing new offer(s).

Such B-2-B business can change the end-user behaviour in terms of loyalty. So that may be it. But there are so many apps for same payment interface, and I can imagine that there can be just an app which helps merchant receive payment from end-user without any additional fees (0.0000).

Ant Financial(Ali PAY) is valued around $150B.

:O Just checked this. I knew about AliPay but never bothered to check the valuation.

If you own the demand, you can always change the backend and start charging fees.