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Paytm Karo - The Story of Paytm

  • Mallika Rangaiah
  • Oct 23, 2020
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Imagine a scenario where you’ve set out for an exhausting morning run and are thirsting for a bottle of water, only to realize you forgot to carry your wallet along. But that's hardly an issue when you're carrying your phone and online payment platforms enter the picture. The convenience of these online payment platforms is the main advantage they hold which has played an integral role in their widespread application. 


After the advent of demonetization, “Paytm Karo” became the legendary phrase that popped in the minds of almost every Indian when it came to online shopping. Paytm is one such platform which has essayed an integral role in shaping the present retail industry by revolutionizing the payment approach.


As the platform of paytm expands further with additional e-retail as well as e-commerce stores, the scope and potential of the digital payments platform grow. Glimpses of the interesting journey of this platform have been highlighted through this article. 



About Paytm


The acronym for “Pay Through Mobile” - Paytm had been established in 2010 by Vijay Shekhar Sharma.  Paytm is primarily an Indian e-commerce website as well as an application that allows its users to practice online payment for various services.


At first, this digital payment platform was adopted for undertaking payments for limited utilities such as mobile, DTH recharge, and shopping bills. Yet over the last couple of years, the platform has enhanced its scope and has engaged a wide range of services within the umbrella of its operations. 


The platform presently permits its users to recharge through their mobile number for services such as paying their utility bills, transferring funds to other bank accounts, booking tickets for flights, trains or buses or booking hotel reservations,  and receive many gift vouchers or cashback offers.


Paytm is a prominent financial services firm that facilitates various financial solutions to its customers via offline as well as online platforms. The platform’s parent organization is One97 Communications which is based in Uttar Pradesh’s Noida. 


Paytm alongside One97 Communications is the owner of Paytm Payments Bank which holds over 58 million account holders. The platform’s subsidiary ‘Paytm Money’ is considered to be the nation’s biggest investment platform and is also one of the biggest contributors of Systematic Investment Plans (SIP) to the Mutual Funds Industry.


The platform has also been granted approvals to introduce its services in Stock Broking, Demat, and National Pension System (NPS). Its other subsidiaries which include Paytm First Games as well as Paytm Insurance have also garnered a massive global user base.


There are various online payment portals accessible in the Indian nation and plenty of the users tend to have more than one payment app installed in their smartphones. Paytm’s main competitors include PayPal, Mobikwik, and Freecharge

Paytm Founder


“If you’re not the customer, don’t build it.”

- Vijay Shekhar Sharma 


The founder of Paytm is Vijay Shekhar Sharma. Being a student of the Delhi College of Engineering he began his entrepreneurial venture sometime in 1997 through his Indiasite.net website. This company was later on sold and the amount raised was used to launch the parent company of Paytm, i.e, One97 Communications in 2000 which continues to be headed by him.


As per Business Insider, Vijay Shekhar Sharma’s wealth grew at a massive rate during the period of the last 5 years, having risen from the 171st rank in 2016 to 44th rank in 2020. The wealth plumetted in 2021 however, and now stands at around Rs 18,900 crore, falling by 18 per cent from Rs 23,000 crore last year, as per the Hurun India Rich List 2021



The Origin of Paytm


Paytm's renowned founder Vijay Shekhar Sharma had been brought up in Aligarh Uttar Pradesh. A Delhi College of Engineering graduate, he established his first Tata XS Communications in college which developed Content Management Systems that had been adopted by publications such as The Indian Express.


In 2000, established Paytm's parent organization One97 communications, through an ₹8 lakh loan. Finally established Paytm in 2010 for offering a mobile wallet that consumers could reach via their smartphones or the website. 


Presently apart from the wallet, Paytm investment and wealth management arm, e-commerce arm, and a payments bank.



Business Model


"Payment is a no-margin business. Money will be made on content, commerce, and advertising. And then, we will build financial services on top of that,"

- Vijay Shekhar Sharma 

This image shows the Revenue Model of Paytm

Revenue Model of Paytm Karo


Paytm has laid the foundation for the various other digital payment platforms we observe in the Indian nation, as it sets an example from which these companies can observe and imbibe from. Initially Paytm limited its focus towards the requirements of the younger population and later on extended its emphasis to incorporate the older Indian population as well.


From being a mere recharge and bills payment platform the organization has expanded to emerge as an online banking service kind of website that offers a plethora of offers as well as services. The platform is one of the rare payment sites that facilitates a 50- 100% cashback in pretty much all the payment transactions undertaken by the user. 


The application facilitates the customers with an e-wallet feature that allows them to store a section of the amount exclusively for particular transactions. paytm’s platform also facilitates online booking as well as reservation services.


The platform functions as a sort of marketplace that permits users to execute their daily requirements easily.  It is also a virtual bank that has been approved by the Reserve Bank of India


The platform has also launched the idea of Digital Gold through which the users can perform online purchasing and selling of gold. They contain an all-time functioning customer service facility that promptly resolves any problems relating to the application. 



Paytm Growth


As confirmed by Financial Express, at the start of September 2020, Paytm declared its launch of a subscription service for businesses. Titled as ‘Paytm Subscriptions’, the service aims to allow businesses to gather payments from their users through flexible and easy payment methods like Paytm wallets, cards, or UPI. 


The paytm Payments Bank Limited platform announced that its net profit in FY 19-20 escalated to Rs.29.8 Cr from Rs.19.2 Cr in the last year, resulting in an escalation of 55%. As claimed by paytm on its blog, the platform’s FY20 revenue grew to Rs.3,629 Cr with a 40 percent fall in losses in comparison to the previous year.



Paytm IPO


Paytm's IPO was launched on November 8 for investors and it came to a close on November 10. The price band for the offer was fixed at Rs 2,080 to Rs 2,150 per equity share.


Although the respose was quite underwhelming in the initial two days, the platform managed to weather the storm on its 3rd and last day. Paytm's IPO gained 91.3 million shares against an offer size of 48.4 million, i.e 1.89 times the subscription. 



Being removed from the Google Play Store


The recent challenge Paytm in the month of September of this year was the temporary removal of its application from Google’s Android Play Store, the cause as claimed by the tech giant, being that the platform had been violating its policy and encouraging unsupervised gambling, which triggered a controversy with Vijay Shekhar Sharma, Paytm's founder who labeled the step to be an action violating the nations’ PM’s Amanirbhar Bharat mission. 


The app returned to the Play Store a couple of hours after Paytm consented to remove its fresh UPI cashback facility it had termed ‘Paytm Cricket League’ which had been introduced in the morning before the beginning of the Indian Premier League (IPL)’s 13th edition. 


About Paytm Mini App Store


Taking a step further in its battle against Google Paytm has recently declared the launch of its “mini-app” store. As reported by The Hindu, the platform claims that this is an attempt towards backing Indian developers in making their items reach the public. 


The mini-applications will be a custom-created mobile website that offers users an app-like experience while sparing them from having to download them.


For this store, Paytm's platform will be adding a fresh section upon its primary app in which these mini-apps will be displayed and which can be reached by the users of the platform’s app. 


“I am proud that we are launching something that creates an opportunity for every Indian app developer. Paytm Mini App Store empowers our young Indian developers to leverage our reach and payments to build new innovative services. For Paytm users, it will be a seamless experience that doesn’t require any separate download and enables them to use their preferred payment option,” 

- Vijay Shekhar Sharma, Founder & CEO, Paytm


This launch has taken place at a time when the founder of Paytm alongside the founders of various other Indian startups, has been leading the disapproval which has been emerging against Google over the platform’s criteria that applications adopt the Play Store’s billing system for all procurement of digital items taking place inside the app.



Recent Fundings


Some of the major investors of Paytm are Alibaba and Softbank. In early November, Paytm raised Rs 8,235 crore from anchor investors ahead of its IPO launch. 


Prior to this, in 2019 Paytm raised 1 Billion USD from T Rowe Price, a US-based asset management company. This funding has made the platform’s total valuation reach 16 Billion USD


The platform has recently has acquired a 100% stake in the digital lending startup CreditMate for an undisclosed amount in the early days of October 2021. 




"I don't follow the fintech industry. I follow the journey of a customer. Over a period of time, we will be an internet ecosystem in India with the largest pool of users. It has happened in the US and in China."

- Vijay Shekhar Sharma, founder & CEO, paytm


Paytm has been revolutionizing and updating its services in accordance with the shifting requirements of its users as well as the industry. This is the primary reason why the platform’s user base is escalating on a daily basis. paytm has set a collection of dynamic plans for the upcoming years which lays the foundation of a promising future for the platform, facilitating a service where its users receive an exciting overall experience.  

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