According to a source familiar with the matter, Facebook's WhatsApp is working tirelessly on gaining regulatory approval for payments service in India. With the regulatory approval, it will roll out those services by June.
With Facebook's partnership with Reliance, it will provide WhatsApp with an inside track on payments for Reliance's retail unit, which aims to serve tens of millions of small business (kirana shops) across India.
In addition to this, it will be able to link up with Reliance's telecom business, which has blown the market with its entrance since late 2016, and India provides 400 million users to WhatsApp only.
"If someone would have lost sleep as the Facebook-Reliance deal was announced, it must be Vijay Shekhar Sharma," said a second-source, referring to Paytm's founder.
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The source, who has close relations with both Reliance and Paytm, declined to be identified to protect business interests.
Compared to other major players in India's digital payments markets, Paytm is seen as more vulnerable to attack, already on the backfoot amid competition from Alphabet's Google Pay and Walmart's PhonePe.
While having previously attracted investments from the likes of Japan's SoftBank, China's Alibaba and U.S.-based Berkshire Hathaway, it lacks its own wells of capital for funding, putting it at a disadvantage.
Paytm also remains unprofitable, with its parent firm reporting a loss of over $500 million in the year ended March 2019.