India needs foreign shareholding and foreign capital, but it also needs to protect the interests of Indian developers and save them from being heavily reliant on just one tech firm, says Paytm founder and chief executive officer (CEO) Vijay Shekhar Sharma.
Sharma says this in the context of Alibaba-backed Paytm’s spat with Google after the financial services app was pulled off the tech giant’s Play Store on Android for a few hours last September for allegedly violating its policies. In early October, Paytm launched its mini app store within the Paytm app for Android and has committed ₹10 crore for developers.
Mini apps are custom-built web apps which give users an app-like experience without having to download one. It has partnered with companies like Ola, Domino’s, and Decathlon, among others, and wants a million such apps on its mini app store by 2021.
Google’s Android operating system for mobile devices is like oxygen for millions of people in emerging economies since it powers most mobile phones in these countries, argues Vijay Shekhar Sharma, adding that it is not sustainable for developers to pay Google the commission it charges for in-app purchases on the Play Store.
What Sharma is referring to is the commission Google charges developers for all in-app purchases on the Play Store; Google also mandates that all developers on the Play Store use the Google Play billing system. According to Google, this policy has been around for some time but hadn’t been strictly implemented. A few months earlier, Google said all developers on the Play Store needed to be compliant with the policy by September 30, 2021. But after getting feedback from Indian developers, Google postponed the deadline to March 31, 2022.
Sharma talks to Fortune India about the dispute, rallying Indian developers, Paytm’s plans for the mini app store, and how developers should be supported, among other things. Edited excerpts:
Has Paytm become a rallying force for Indian developers?
It is not that we are a rallying force against big tech or something. We are a rallying force for India. [We] will bring the best India has to offer to the world. We want to be the champion of this country.
Android is like oxygen. Millions of people in emerging economies use Android. Its [usage is] more than 90% everywhere in the world. Countries like us, democracies, which are dependent on technology, now are dependent on Google's whims and fancies. Google wants to take 30% [commission on in-app purchases] in the U.S.? Totally understand that, as it’s a developed market. There will be a margin, and there will be revenue, and enough sustainability. [But why do] you want to make 30% from people like us in India who do not have that kind of margins? Which company in India has 30% Ebitda margin?
Are you in touch with Google CEO Sundar Pichai on this?
I spoke to the Google team. I sent him an email some time ago. Interestingly, after we became so vocal, there was a team that was sent to talk to us. They said that they now understood how big the issue is and that they will quickly come back on this. But we haven’t heard back yet.
I believe that Sundar is one of the best CEOs in the world. And his team is incredible.
It’s incredible that Google has committed to invest $10 billion in this country. So, they understand and aspire to become a partner in India’s growth. Their actions can become far more aligned to India’s developer ecosystem, technology ecosystem, startup ecosystem—they can be the champions of it. The acknowledgement there is out there, the commitment to spend money is out there, but the problem is that their actions are not the same as their words.
Foreign shareholding or foreign companies are not the bad part for India’s economy. We need chips made by Intel, AMD, and Qualcomm in this country because we are not making any; we need the operating system made by Microsoft and Google in this country, because we are not making any; we need investments from everybody in the west to the east, because we are not generating so much investment in this country.Vijay Shekhar Sharma, founder and CEO, Paytm
What are your plans for the mini app store?
The ambition is to become the go-to destination for customers, not just for payments, but for as many things that they can complete on it.
Imagine there is an education app; you don't know whether you want to download it or not, but you want to try it out. [In the mini app store, you can] try it out in an environment that doesn’t need you to download it.
There are half a billion Internet connections in India, which simply means there will be, if not half a billion, if not half a million, at least a couple of hundred thousand big services. The biggest problem for every developer is how to make their service available [to customers, that is, reach customers]. And how to monetise that service. [If] that is something Paytm can offer, we would love to be the champion and platform [for it]. And if that makes us a super app, so be it. We are not chasing that label [of becoming a super app].
How can the government support Indian developers?
I believe that it is important for governments in their countries and especially in India to understand that we need to champion technology that is coming out of India. So that we can work on the problems and attributions that are unique to India. No international company, unless it is commercially beneficial, would like to do it.
You have been speaking about Google and how it is hurting Indian developers. But Paytm’s major shareholders are all foreign companies. What do you have to say about that?
Foreign shareholding or foreign companies are not the bad part for India’s economy. We need chips made by Intel, AMD, and Qualcomm in this country because we are not making any; we need the operating system made by Microsoft and Google in this country, because we are not making any; we need investments from everybody in the west to the east, because we are not generating so much investment in this country.
The restrictions should not be applied to any of these things, because everything in this country that we are not producing and the capital that we need, we don’t have access to, must be accessible to the developers, entrepreneurs, and the businessmen in this country. The important aspect is that we play by fair and equal rules for everyone. If I have [a dispute] with someone, I should be able to go to the local court in India and ask for justice. It is about a level playing field, not about blocking someone.
What are the things you believe India needs to do to be a truly digital economy?
India’s digital economy dreams will be materialised when we (i) open the market for everyone and make sure everyone plays by the rules, which effectively [means] is that you do not create any arbitrary advantage for foreigners; (ii) you have talent, which is locally groomed, or you import people from outside. China imports so many people from outside, in India, we have not yet been able to do it; (iii) champion investors—investors who have bet on the Indian economy, ease of doing business or the investment-friendly environment.
Read more about Paytm’s big plans with its mini app store in our latest issue. On stands now.