PayPal buying a stake in Snapdeal-owned Freecharge could heat up the online payments industry in India dominated by Paytm. The deal could see the sale of a 25% stake for around $200 million.
The move could heat up competition in the online payments industry in India that has received a boost in recent weeks with the government invalidating old high-denomination currency notes and driving the move towards a cashless economy.
PayPal’s initial offer was for a controlling 51% stake in Freecharge. But SoftBank, which is the largest shareholder in Snapdeal, is not keen to divest a majority stake and may sell between 20-25% in Freecharge.
Paytm was founded in 2010 as a prepaid mobile recharge website by One97 Communications, It launched a digital wallet in 2014.
In October,The Economic Times reported that SoftBank was in talks to invest up to $150-200 million in Freecharge along with other investors. The report said that the transaction would value the company at around $900 million to $1 billion.