Paytm will continue to support PayPay with technology and product innovation. Credit: kk1hb/ Shutterstock.

Paytm, through its Singapore unit, has divested its stake in Japanese payments company PayPay to SoftBank for JPY 41.9bn ($278.5m).

Paytm Singapore had acquired stock acquisition rights (SARs) in PayPay in September 2020.

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In a stock exchange filing announcing the move, Paytm parent One97 Communications said that these SARs will now be sold to SoftBank Vision Fund 2 entity.

The deal values PayPay at JPY1.06tn and is expected to complete this month, contingent upon necessary corporate approvals and standard closing conditions.

The net proceeds from the SARs sale are claimed to strengthen One97 Communications consolidated cash reserves to drive future business initiatives and enhancing shareholder value.

Despite the sale, Paytm will continue to support PayPay with technology and product innovation.

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Paytm Singapore’s board of directors has approved the sale.

A Paytm Singapore spokesperson said: “We are grateful to Masayoshi-san and the PayPay team for giving us the opportunity to together create a mobile payment revolution in Japan. We remain fully committed and will continue to support PayPay’s product and technology innovations in future. We are working on introducing new AI-powered features to accelerate PayPay’s vision in Japan.”

PayPay was established in 2018 through a collaboration between SoftBank Group and Yahoo Japan.

SoftBank, an early supporter of Paytm, leveraged the startup’s technological capabilities to develop PayPay’s operations in Japan, reported The Times of India.

As of September 2024, Paytm reported a robust cash balance of INR104.1bn. In the second quarter of financial year 2025, the company achieved its first quarterly profit of INR9.3bn on a consolidated basis, backed by a one-time gain from the sale of its entertainment ticketing business to Zomato.