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Paytm as it Morphs from Fintech Startup to Finance Startup

Payments is merely a way to lure users who will use Paytm's other monetizable services

Photo Credit : NDTV Gadgets,

Paytm is ready to become a wealth management financial services provider. At the launch of Paytm Digital Gold, Vijay Shekhar Sharma (VSS) the founder of Paytm said,

“It’s more about being a finance startup than a fintech startup, because I think the country is being built around financial services not just technology. This is the time we are seeing financial services see a breakthrough of this scale.” We saw this happen in one of the biggest verticals for financial services, payments.

VSS continued, “Mobile will eventually take online payments beyond physical plastic. Plastic was traditionally used because of limitations of PoS machine cost and distribution cost of PoS machine. With mobile, people can send and receive money without a PoS machine.

We truly believe mobile is the way to go. If you can do something on the mobile, then you should do it on the mobile. And that’s sole reason the Paytm name itself carries ‘mobile’ in it. Paytm is short for ‘Pay through mobile’.”

Paytm stats

- Largest Internet commerce ecosystem in India with 1.5 billion transaction in FY17

- 218 millon wallets, 5 million merchants and 5 billion dollars worth of GMV in FY 2017

- Around 55 percent of the user traffic comes from tier 2 and small cities. Smaller cities/towns make up 55% of the transaction and metros make up 45%

- The app has 10% users over 45 years of age. “It’s a true test your app is useful and relevant when people across all ages use it,” said VSS

- 0.5 billion transactions in FY 2016 to 1.5 billion transactions in FY 2017 - 3x growth in transactions in FY17

- Fastest growing cities for Paytm usage are Jaipur, Sonipat, Vijaywada, Vishakapatnam and Durgapur

How Paytm makes money

On other popular messaging services possibly getting into payments, VSS said, “My belief is that the more companies getting into digital payments the better it is for the country.” The more users there will be transacting online the better it is for the likes of Paytm. Payments is only the hook to get customers, and the company’s founder says they have invested 500 million dollars just for this. Value added services is how Paytm makes money, digital gold loans will be coming soon - perhaps in another 3 months.

On the issue of capital dumping and concern cited by prominent Indian entrepreneurs and investors on lack of regulations for foreign competitors, VSS said, “The guy who raises 5 million will be jealous of the guy who raised 10 million. The guy who raised 10 million will be jealous of the guy who raised 1 billion…it’s a free market and India needs investment. But who says India can’t win the game? In fact I hope more and more domestic investors get involved in the market.”

Paytm verticals

- Consumer payments for telecom recharge, utilities bills, third party online payments, third party offline payments and peer-to-peer money transactions can be done via Paytm.

- Offline payments make up a huge chunk of the transactions and the ratio to online payments is tens of time bigger.

- In the commercial vertical of Paytm you have the following:

1. Travel – over 2 million flights, bus, trains and hotels booked monthly

2. Movies – Over 3 million movie tickets booked monthly, 20 percent of opening day box office transactions are done via Paytm

3. Paytm Mall – over 500 million SKUs available

4. Deals – 10 million deals sold monthly

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