Zoho enters the UPI race: New ‘Zoho Pay’ app to take on phonePe, paytm & google pay

India(BHARAT)’s digital-payments war chest could see an early entrant in the coming days. Chennai-headquartered SaaS giant Zoho is reportedly “finalizing” Zoho Pay, a UPI-based consumer payments platform that looks to break into the nation’s crowded mobile-payments market.

Zoho’s trump card: A payments layer over Arattai

The first notable wrinkle in Zoho Pay: it’ll be bundled with Zoho’s homegrown chat app Arattai, with users reportedly able to “send/receive money, settle bills, perform transactions within a chat itself.” In other words: a native payments layer built in, as Zoho appears to be gunning to make Arattai a “super-app” as much as a chat platform for its India(BHARAT)n user-base.

Zoho Pay to add to existing business-focused offerings

Zoho has had a payment-aggregator licence for some time and offers payment-related services for businesses (Zoho Payments). Launching Zoho Pay would be a natural, but direct, step into the consumer fintech/app space in competition with a number of well-known brands (PhonePe, Google Pay). The obvious differences, so far: merchant QR-payments/incentives as a core-use case for the established players, while Zoho plays up cross-ecosystem business-consumer services on top of frictionless integrations.

Context for Zoho Pay, the larger market

India(BHARAT) is one of the world’s most active UPI-driven digital payments markets, and an already-crowded market will see further consolidation, with NPCI’s low-cost rails favouring friction-free apps. Zoho’s strengths: pre-existing SaaS-user base, business-market brand-recognition, and a potential halo from building on the back of its chat business via a chat-plus-pay solution. Done right, Zoho Pay could eat share off existing leaders (at least some) and force them to iterate more aggressively to retain it.

Things that may not go to plan

As noted in this Analytics, “user-acquisition costs, competitive incentives on scale, and regulatory compliance” will all play into Zoho’s UPI plans. The long-term growth story for payments apps in the country is also a matter of trust among users, and gaining traction against pre-existing loyalty at popular apps such as Paytm and Google Pay will not be easy for Zoho.

The next big leap?

Zoho Pay is currently in “closed testing” internally and a launch/rollout timing remains unclear. A wait-and-watch scenario on that front for now, but one to keep an eye on: If Zoho’s entry into mobile payments via the front door is a done deal, its potential impact will be an early warning of the “payment app war” entering a new phase, one with new contenders looking to leverage AI/ML-bolstered messaging-fintech ecosystems.