Paytm is considering the acquisition of Bitsila

Friday 9 February 2024 11:02 CET | News

India-based digital payments app Paytm has engaged in talks to acquire Bengaluru-based interoperable ecommerce startup Bitsila.


Specifically, has reported that Paytm, a major player in the fintech industry, is reportedly finalising an acquisition deal with Bitsila, an interoperable ecommerce startup, amidst uncertainties surrounding its payments business due to regulatory issues. 

The same source revealed that Bitsila, based in Bengaluru, currently ranks as the third-largest seller side platform by transactions on the Open Network for Digital Commerce (ONDC). While the deal is nearing completion and is expected to close in the coming week, specific details such as the deal size and payment method remain undisclosed at the time of writing. 

Bitsila, established in 2020, previously secured funding from Antler India and Phanindra Sama, the founder of Redbus. The company operates as a seller-side app within ONDC, facilitating the onboarding of small merchants onto the network. With Paytm already positioned as a buyer app on ONDC since 2022, acquiring Bitsila would enable Paytm to extend its presence within the network to the seller side, enhancing its market reach.


India-based digital payments app Paytm has engaged in talks to acquire Bengaluru-based interoperable ecommerce startup Bitsila.


Paytm's regulatory issues 

The acquisition move comes at a time when Paytm faces scrutiny from the Reserve Bank of India (RBI) over various concerns, including foreign exchange violations and lapses in know-your-customer (KYC) procedures. The regulator's investigation has revealed significant irregularities in KYC practices, raising concerns about potential money laundering activities.

Moreover, Paytm suffered a significant dip in its market valuation following an order issued by the Reserve Bank of India in February 2024.

To be precise, shares in Paytm experienced a consecutive 20% decline for the second day following a regulatory directive to its banking arm to suspend operations. Despite reassurances from CEO Vijay Shekhar Sharma that the digital payments app would continue to operate normally, the company faced a substantial loss in market value, amounting to approximately USD 2 billion according to Reuters.  

Paytm's ambitions within ONDC remain significant, with company representatives revealing an aim to onboard 10 million merchants onto the platform by the end of 2025. They also highlighted the role of ONDC in democratising ecommerce by breaking down transaction components such as seller, logistics, and payment, thus reducing the barriers to entry for new players in the ecosystem. cites recent data that indicates a notable surge in ONDC transactions, with retail purchases surpassing 3 million in January, marking a substantial increase compared to previous years. Additionally, the network recorded over 3.5 million mobility bookings during the same period, reflecting a growing trend in transactions across various categories.

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Keywords: acquisition, digital payments, ecommerce, payments
Categories: Payments & Commerce
Companies: Paytm
Countries: India
This article is part of category

Payments & Commerce


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