The investment values the Noida, India-based company at $5 billion, up from an earlier valuation of about $2.5 billion, the person said.
MediaTek s contribution amounted to $60 million, according to the person.
In a country where users are increasingly coming online via low-cost smartphones, Paytm provides a popular mobile app that can be used to pay for services like rides from Uber Technologies Inc. and utility bill payments.
Paytm uses its payment service to help direct traffic to its other businesses, like e-commerce.
The company says it provides some 135 million mobile wallets in India, where few consumers have credit cards and many prefer to pay in cash.
MediaTek couldn't immediately be reached for comment.