Paytm: One-Stop Solution For All Your Needs
Introduction: Recently, we conducted a survey on LinkedIn to understand which is the most famous and widely used digital payment app in India. One name that emerged was Paytm. Whether you pay at a luxury hotel or a roadside Paan Shop, crowded cities or at the remote villages in the Himalayas, one thing is common everywhere, and that is Paytm.
Paytm is one of the largest Fin-Tech Company with a revenue of over 500 million dollars in 2019. But this does not happen overnight. Here is an interesting case study describing the journey of Paytm.
Founded by Mr. Vijay Shekhar Sharma in August 2010, Paytm was initially launched as a prepaid mobile and DTH recharge platform. It now enables its customer to make almost every kind of transactions on a click of a button. In just a span of 10 years, Paytm has acquired more than 350 million users.
Major investors of Paytm are Vijay Shekhar Sharma, One97 Communications, Alibaba Group, Soft Bank, SAIF and BH International. The numerous sources of revenue for Paytm include advertisements on its website, commissions on utility bills, recharges and e-wallet transactions, Paytm Mall commission and interest earned on Escrow account maintenance in nationalized banks.
History of Paytm :
This industrious brand was founded by Vijay Shekhar Sharma in Noida, a region vicinity to India’s capital that is New Delhi, established in the month of August 2010 with an investment of $2 million. It began the operations as a DTH recharge platform and prepaid mobile, the data card, post-paid mobile, and landline bill payments were included later in 2013.
In January 2014 Paytm launched an E-wallet which was added as the payment option in Indian Railways and Uber, also company pushed their business towards E-commerce with bus ticketing and online deals. In 2015 it introduced more use-cases like metro recharges, education fees, water bills, gas, electricity, and began the payment gateway for Indian Railways.
In 2016 the company launched many more such features like ticket booking for movies, amusement, events, flight bookings and Paytm QR as well, following rail bookings and cards later that year. Paytm’s user base grew from 11.8 million in August 2014 to 104 million in August 2015. In annualized GMV run rate, travel business crossed $500 million with 2 million tickets booked per month.
In 2017 the company became India’s first payment app which crossed over 100 million app downloads. Following that year company launched Paytm Gold, where users can buy gold as little as Rs 1 online, following that year Paytm also introduced Paytm payments bank and a messaging platform called as ‘Inbox’ where In chat payment options made available for the users among other products.
In 2018 Paytm began their UPI services, and also allowed merchants to accept Paytm, and card payments into their bank accounts at a charge of 0%, also it has launched an amazing app which is called as ‘Paytm for Business’ app and has been termed as a business with Paytm app, which has made the business easy for merchants by accessing the features of the app like tracking payments, day –to — day settlements instantly, this increased the merchant base more than 7 billion by March 2018. The company also launched two wealth management products which are Paytm gold saving plans and Gold gifting which will help in simplifying the long term savings. Following that year Paytm also entered into a joint venture with Alibaba group-owned gaming company Agtech holdings introduced Gamepind, which was a mobile gaming platform, it was rebranded as first games of Paytm in June 2019. Paytm money was launched in 2018 with an investment of 9 crores, this was launched to bring investment and wealth management products for Indians.
In 2019 company launched a loyalty program which was subscription-based, which was termed as ‘Paytm first’, also following that year Paytm became a partner with Citibank to launch the first-ever Paytm credit card.
2020, Paytm partnered with Tata Starbucks, so that users can buy food online during the time of Covid-19 Pandemic
2010:One97 Communications launched Paytm as a prepaid mobile and DTH recharge platform.
2012: Post-paid payment options made available.
2013: Data cards and Landline Bill payments added.
2014: Launching of Paytm Wallet and included options for railway ticket booking, MakeMyTrip, BookmyShow, HomeShop18, eBay, Jabong, etc. Paytm sets up Paytm Labs in Toronto, Canada
2015:Launches QR code-based payments. More options added such as education fees, metro recharges, and electricity, gas and water bill payments. Also, started powering payment gateway for the Indian Railways.
2016: Paytm launched Paytm QR and flight ticket bookings through its app. Paytm also launched movies, events and amusement park ticketing service.
2017: Paytm crossed 100 million app downloads. Paytm launched Paytm Gold, Paytm Mall and Paytm Payments Bank.
2018: Allowed merchants to accept Paytm, UPI and Card payments directly into their bank accounts at 0% charge.In September, Paytm Launched Paytm Money, a mutual funds app.
2019: Paytm partnered with Citibank to launch Paytm First credit card.
2020: Paytm partnered with Starbucks to allow its customers to book orders online.
1) Paytm Money — Paytm Money is India’s simplest, most transparent, and the best platform for investment, which helps grow money of the investors, and a large number of people can access the wealth management at the same time, Paytm money is the big advantage to invest in mutual funds, as it provides people with the top-rated schemes, funds with higher returns, minimum investment amount and India trusted fund manager, it also provides with the detailed tracking of the investments, detailed mutual fund information, it has 0% charges on investments and no commission, and provides free digital KYC on mobile, invests from 5 bank accounts and high returns with a direct plan.
2) Paytm Wallet — It has proved to be a boon for bank and retailers as it structures the connections between bank and retailers, it helps in tasks like pay for the tickets, taking care of the tabs, and to pay to someone in need, even some popular websites are using Paytm wallet, for example, Zovi, Healthkart, Ola cabs, make my trip, uber, fab furnish and many more. It allows users to save money by giving cashback offers on regular basis and offers are trustworthy. Also, Paytm Wallets come with the guaranteed refund like if you are not satisfied with the Paytm’s wallet services, you will get your money refunded within hours. Paytm wallet recently collaborated with DMRC so the users can recharge for their Delhi metro card through Paytm wallet only, this is a great move in order to allow users as much as they want to travel, this service will be available soon.
3) Paytm Mall — In 2017 Paytm introduced its Paytm mall for the first time, it has allowed users to shop from among 1.4 lacs registered sellers under Paytm mall. Paytm Mall is the B2C model, took this idea from china’s B2C retail stage, known as TMAll. To guarantee buyer’s trust in Paytm mall, it has guaranteed stockrooms and channels to go through the items where the 1.4 lacs merchants listed. Paytm mall joined forces with 40+ messengers and has set up 17 satisfaction focuses crosswise over India. In March 2018 Paytm mall raised about $200 million from SAIF Partners and Alibaba clusters. With the income of 774 crores it possessed a loss of 1800 cr in the year 2018 and also the piece if the pie was fell down to 3% in 2018 from 5.6% in 2017.
4) Paytm Digital Gold –Paytm has also launched its digital gold, that is computerized gold can say, this will make users buy, sell and store gold, but at an advanced level, for now, the users have to pay the amount so that the gold can be conveyed to their near ones, Paytm was aware from the fact that gold is used as a resource in India and how to develop a chance from it and so Paytm made a gold app, it fascinated people that how it can be an advantage to people, people can have their own individual gold accounts on Paytm gold, further the gold will be stored MMTC PAMP’s secure and also 100% guaranteed lockers. Amazing thing is that you can track the investments on a regular basis using gold passbook available on Paytm app, and also you can have your gold delivered anytime you want.
Marketing campaigns launched by Paytm:
- Cash nahi! Paytm Karo:
This is the primary campaign of Paytm will tell viewers that if you don’t have cash then you did not need to worry, just send money using Paytm.
2) Dosti bhi Date bhi:
This campaign tells customers that movie tickets can easily be booked using Paytm app.
3) Ab Bank Transfer k liye bhi Paytm Karo:
This campaign tells viewers that immediate bank money transfer can be done using Paytm app.
4) Gold me savings karo… Paytm Karo:
This campaign urge customers to invest in 24 carrot pure gold using Paytm Gold. Paytm kept Rupee 1 as the minimum amount of investment in order to reach a wide number of customers.
5) Kisiki life ka Paytm bano, Paytm Karo:
This campaign focuses on teaching and solving daily payment problems of others using Paytm app.
6) All in One QR Code:
This campaign is to motivate retail shops and business owners to use All-in-One Paytm QR code through which people can transfer money using any UPI payment app with no limit 0% charges.
7) Scan to Order:
As during COVID period, it’s very important to maintain social distancing. So, Paytm has introduced a new way of ordering at restaurants where a customer needs to scan a QR code placed at every table, order from the menu appeared on the screen and pay using the app.
Issues/Challenges faced by Paytm and its consumers:
Back in 2016, when demonetization was announced by the government, Paytm’s demand was increased amongst the people, but with more the demand more the challenges for Paytm, when it came to trademark infringement, transaction glitches, and so on…
1) Ignorance of cost of infrastructure and focused on advertising cost –
During the time of demonetization, Paytm was bombarded with the new users, Paytm got into that pressure and couldn’t handle it, and the company faced continued transaction problem, customers faced problem while loading the money in Paytm wallet, it showed the money deducted in the customer’s bank accounts but Paytm wallets didn’t show any credit, users tried to complain about the problem to get their money back into their bank accounts but that too failed. It was also from the side of customer care who were too ignorant to customer issues, to reach out to Paytm, customers started to tweet so that their queries and requests can be heard and to get done with their transactions related problem, Paytm tried to solve the problem using twitter by giving contact number of Paytm’s customer care and also shared the reasons why Paytm is facing transaction problem through Paytm blogs and twitter, Paytm’s twitter profile was bombarded with messages of customers and their transactions related problem.
On this N Chandramouli, CEO TRA said “when demonetization was announced, Paytm couldn’t have anticipated 1000% jump in users. What a technology company like Paytm should have done at that point was focus on strengthening its backend and creating a robust platform, instead of focusing on advertising.”
2) Paytm’s suspected fraud –
After all these, Paytm got a new challenge to face, it was accused of a fraud of around 10 lacs filed against some 22 private individuals, for this Paytm’s employees were investigated for defaming and defrauding the company itself. It was believed by the police that the fraud was facilitated by some insider.
3) Infringement of trademark case filled by PayPal –
On December 18th PayPal filled a case against Paytm of trademark infringement, PayPal has said in the complaint, that there is no such reason to take on identical colours and colour scheme other than the company’s own benefit sake, the complaint came when Paytm advertised its logo on 8th July.
4) Paytm’s removel from Playstore -
Earlier in September 2020, Google suspended Paytm app, it said that Paytm has violeted Google play store policies and supports online Casinos, and unregulated gambling app which supports facilitated sports betting, later Separately in a blog post, the company said it launched ‘Paytm Cricket League’ on its app for users to engage in their passion of cricket and get cashback. The game allows users to get player stickers after each transaction, collect them, and receive Paytm cashback. later Paytm was back again on Google Play Store.
While checking 5.5 billion exchanges in 2Y19, Paytm has professed to come at gross exchange esteem of over $50 billion, the Delhi based prestigious organization dedicated this development to the rising demand of Paytm over numerous utilization cases, like some examples are expenses, utility instalments, travel booking, retail instalments, games among others, excitement. Now to maintain clients and to expand development alongside, Paytm introduced membership-based prizes programs that are known as Paytm’s first.
Senior VP of Paytm Deepak Abbot while discussing the workable arrangements said “we are centred around creating tech-driven arrangements, incorporated client lifecycle the board, upgrading the client experience and growing tier 4–5 urban communities. We are certain to accomplish 12 billion exchanges before the part of the bargain year. Ministry of Electronics and Information technology requested Paytm a month ago, to help its objective to support 40 billion advanced exchanges in FY20.
To achieve two times more development this year, the company has shared designs to incorporate man-made brainpower in its model, the organization claimed to possess half piece of the instalment industry in India, along with 400 million month-to-month on the stage exchanges. With shareable QR code to keen coordination, Paytm has remarkably done well with various new companies and organization, Paytm establishes itself as a supporter whilst providing arrangements and support to the companies.
It has made the work of its clients and customers easy by providing with the processed computerized instalments through any favoured instalment mode, like check cards, net banking, UPI, Paytm wallet, credit cards and likewise, Paytm was the established brand which has introduced to its very own instalment banks in 2017.
For every online exchange like (NEFT, RTGS, IMPS) the versatile Paytm payments bank is the one to keep money with zero charges with no prerequisite base equalization, the bank right now offers a loan cost of 4% per annum for investment accounts.
Competitors of Paytm:
Paytm and Demonetization in India:
Paytm started its payment solutions for offline merchants since 2015. It was the only company doing so in India at that time outside the card networks. As the honorable Prime Minister Mr. Narendra Modi announced demonetization on November 8, 2016, payment solutions provided an infrastructure for Paytm to grow at a rapid pace during the period. As people were facing many issues due to banning of 500 and 1000 rupees notes, Paytm wallet was seen as the simplest answer and people flocked to it. As a result, within three months, the number of Paytm wallets rose from 125 million to 185 million wallets and as it continued growing, the number of Paytm wallets doubled by November 2017.
But the post-demonetization success of Paytm is not free from controversies. On the next day of demonetization, Paytm published a full-page advertisement in the newspapers across the country thanking Honorable Prime Minister Narendra Modi for taking such a bold step. This gave rise to the controversy as it is illegal to use the name or picture of Prime Minister without prior permission from PMO.
Advantages of using Paytm:
1) User Friendly — Paytm is user friendly, people can use Paytm easily, without any hassle, it is made user friendly so that people who are not into technology and are not tech-savvy can use it too, and provided with the simple user-face has made it more user friendly.
2) Easy digital transactions — It has changed the way we used to transact before, like the old fashioned way is now changed to a new way of transaction s and made it more easily with the use of Paytm, now we can make payments to merchants more quickly and easily and also how one can forget the use of Paytm during the time of demonetization, it came out to be a saviour when people didn’t have cash in hands. And now also, Paytm’s use has augmented amongst shopkeepers and street vendors.
3) Now money can be transferred to a person or business — Money can be transferred to a person or business within seconds, like when someone is in need of money you can simply transfer to their Paytm account.
4) Transfer money to bank — Now it is also possible to transfer money to the bank, and it is an aid to the advantage of Paytm as you can easily transfer money to the bank by using IFSC code and account number, it works like IMPS to get the money transferred to the bank.
5) Mutual funds and Gold — Nothing could be more tremendous to imagine that you can buy gold online, but Paytm made this dream come true, now one can buy digital gold which can also be converted to physical gold. Paytm has also made it easy to buy mutual funds through its app.
6) Uber, Zomato, and other apps are connected to Paytm — By using Paytm it has become easier to pay as these apps use Paytm for the payment of cab rides or to order food online.
Its distinct advantage now Paytm’s fundamental asset has been permitted by RBI, it is only limited to Paytm, as it has made it simpler for the lower society to use Paytm, different assets like programming and planning society made it simpler for lower pay.
During the COVID-19 pandemic in India, Paytm decided to contribute ₹10 to every single user who pays to the PM CARES fund via their app. It aims to donate ₹500 crores, and within ten days they have collected ₹100 crores in their app. Their 1,200 employees have contributed their 15 days or even a few months of their salaries to the fund.
The authors of this case are Shubham Manapure and Tanya Mishra. Shubham Manapure is pursuing MBA (Marketing) from Indian institute of Management (IIM) Sirmaur and Tanya Mishra is pursuing MBA (HR) from Symbiosis Institute of Business Management (SIBM) Nagpur.