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India’s Top Payment App Has Eyes on U.S. Market

“I want to build a product made in India consumed by those…in the developed world,” he said. The U.S. mobile-payment market, where Paytm would face established players like PayPal Inc., amounted to $112 billion last year, according to Forrester Research.

One of India’s largest startups, Paytm was last valued at more than $7 billion, after raising $1.4 billion from SoftBank earlier this year. It has yet to show a profit, according to Mr. Sharma.

Mr. Sharma said the company would use its operations in Canada, where the app was launched in March, as a testing ground. Paytm’s customer base there is small, Mr. Sharma said, but the average transaction is larger than in India, where it has more than 260 million users. Canadians can use Paytm to pay mobile-phone, cable, internet and utility bills, as well as property taxes. They can also pay for insurance.

A Paytm display at a general store in Bengaluru, India, in February. The mobile-payment company is one of the most valuable startups in India, where it has more than 260 million users.

Noida, India-based Paytm is also open to a partnership with Facebook Inc.’s WhatsApp, Mr. Sharma said, which would allow the messaging app’s users to plug into Paytm’s services. WhatsApp declined to comment. Paytm has been preparing to add messaging to its own app.

Prime Minister Narendra Modi’s government has been pushing Indian companies to become world-class. India subsidizes technical education, but many graduates leave the country for better jobs in the U.S. and Europe.

Mr. Sharma, an engineering graduate of Delhi Technological University, began Paytm in 2010 as a mobile-payments firm. It has since expand into e-commerce and other payment services, and in May launched a private bank to compete with the state-owned banks. The goal is at least 500 million savings clients by 2020, Mr. Sharma said.

The government gave Paytm an unintended boost last year by unexpectedly invalidating 86% of currency in circulation in a bid to crack down on tax evasion and corruption. In the cash crunch that followed, many Indians turned to mobile payment apps like Paytm.

“India is itself a huge opportunity,” since many people still lack bank accounts and credit cards, Mr. Sharma said.

One local innovation for India is a savings product that allows Paytm users to buy gold, designed to appeal to the masses of people who store wealth in the form of jewelry.

“The country saves in gold and not in bank accounts,” he said, noting that bank deposits, at about $250 billion, are dwarfed by nearly $1 trillion in household gold holdings.

Paytm has plenty of funds for the years ahead, Mr. Sharma said, and no plans for an initial public offering, though it will continue to seek “intelligent” private and institutional investors to help it grow.