Paytm doubles down on ONDC with Bitsila acquisition

9 Feb 2024 , 09:42 AM

According to reports, Paytm is finalising an acquisition agreement to purchase Bitsila, an interoperable e-commerce startup, at a time when the company’s payments business is under scrutiny owing to a regulatory crisis.

According to news reports, Bitsila, a Bengaluru-based company, is presently the third-largest seller-side platform on the Open Network for Digital Commerce (ONDC) in terms of transactions. Reports say that the deal is well advanced and is expected to close in the upcoming week.

In 2020, Dasharatham Bitla and Sooryah Pokkali created Bitsila. Antler India and Redbus founder Phanindra Sama had earlier contributed to a pre-seed round of funding for Bitsila.

As a seller-side app, the firm plays a B2B function in ONDC by assisting with the onboarding of small merchants into the network.

Paytm was one of the first major businesses to join with the open network in 2022 and is currently a buying app on the ONDC. It will be able to expand its influence within ONDC by joining the seller-side of the network with the Bitsila acquisition.

The changes have occurred while Paytm is being investigated by the Reserve Bank of India for a number of issues, including failures to comply with know your customer (KYC) regulations and foreign exchange infractions.

According to reports, the regulator discovered significant inconsistencies in KYC, putting customers, depositors, and wallet holders at danger. During its investigation, the RBI discovered that the same PAN was associated with over 100 and occasionally over 1,000 consumers in thousands of cases. Money-laundering concerns are raised by the overall value of transactions, which exceeds regulatory limits in minimum KYC pre-paid instruments by Crores.

By the end of 2025, Paytm will have onboarded 10 million merchants to ONDC, according to a statement made on December 4 by Vijay Shekhar Sharma, the founder and CEO of the fintech unicorn.

As we previously reported, in January, ONDC achieved a first: 3 million retail sales in a single month, or more than 100,000 transactions daily on average.

In contrast, there were approximately 1,281 retail transactions on ONDC in January 2023.

In addition, ONDC recorded 3.5 million reservations for mobility (ride-hailing) in January, bringing the network’s overall transactions across all categories to nearly 6.5 million. This is an 18% month-over-month growth over the 5.5 million transactions the network saw in December.

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