Happy Holi! Hope you enjoy the long weekend if not the early summer heat.

It has been a brutal week for payment company Paytm and its founder Vijay Shekhar Sharma.

Late last week, the Reserve Bank of India had prevented Paytm Payments Bank from accepting new customers due to non-compliance with KYC. This week, Bloomberg reported that there were problems giving access to data to entities that shouldn’t have it. Sharma strongly denied this. Even if you ignore this, the problems are serious enough. Moreover, this is not the first time that Paytm Payments Bank has been caught in the regulatory crosshairs.

The news pushed Paytm (One97 Communications Ltd.) stock to new lows. The share has fallen about 70% from the issue price. At least one analyst believes there is still more to do.

There is a bigger reality check in the Paytm story.

First, payments are not a great way to make money, a fact that has been noted by many. Second, the idea of ​​cross-selling based on data is not a new-age brainwave. In fact, as Macquarie’s Suresh Ganapathy puts it, you are a digital direct sales agent. Third, if borrowing is your end game, then you are just one of many banks and non-banks. And no, you probably won’t beat the banks in that game.

Now the believers will tell us that we are hopelessly outdated, we don’t get it, etc, etc. We do get it. We understand that these companies provide convenience and a much better user experience. But beyond that, what do they offer that justifies their lofty private market multiples? Except for the bigger fool theory…

What is the ‘truth about fintech’? We plan to explore this idea more closely over the next week and we look forward to hearing from you.

Elsewhere, reality has come home to bite Amazon, the Future Group and its backers. Certainly are lenders.

In the past two weeks, to overcome delays in closing deals with Future Group entities, the Reliance group has moved forward, wiping the company under the noses of Future Group, its backers and Amazon.

Who knew, who didn’t is a matter of guesswork and debate. But Future Group was shocked, at least on paper. Amazon and the lenders have issued public notices to protect their interests. It’s too late, folks. The company is gone. The story could quite easily be called ‘The Wild Wild West Of Indian Business’.

It’s a mess, a lender told BloombergQuint’s Vishwanath Nair. But as far as the lenders are concerned, at least they only have themselves to blame. If only they had acted on time…. Wait, how many times haven’t we heard that in recent years?

The big macro story of the week was the rise in interest rates by the US Federal Reserve. The Fed Funds Rate was increased by 25 basis points, with the median projections showing interest rates of 1.9% towards the end of the year. The rate hikes and projections were in line with market expectations, so there was no negative reaction. In addition, Fed Chair Jerome Powell painted a picture of an economy strong enough to withstand higher interest rates, which helped.

The Bank of England also raised interest rates again this week.

In India headline inflation stood at 6.07% in February. There are key spending categories that continue to see significant price increases. We’ve talked about food and edible oil, along with fuel. Now, clothing and footwear are also getting high inflation as cotton prices have risen. The cost of your new summer wardrobe will make you sweat, writes Pallavi Nahata. Inflation in the education category also peaked, perhaps when schools reopened.

The good news is that at the end of the week there were some reports of a breakthrough in the Russia-Ukraine negotiations, which caused oil prices to fall. However, this was quickly denied by Russia and crude oil prices rose again.

Yet many people, at least in the markets, believe that the conflict is exhausting itself. Let’s hope that’s the case.

Until next week.

This post Thinkpad: Reality Bites

was original published at “https://www.bloombergquint.com/business/thinkpad-reality-bites”