Paytm, the mobile payment and commerce platform has enabled over 10,00,000 offline merchants across India to accept mobile payments at zero cost. The company’s investors include Ant Financials (Alipay), Alibaba Group, Mediatek, SAIF Partners, Sapphire Venture and Silicon Valley Bank.
Please tell us about the newly launched Paytm’s App POS?
Paytm has updated its app as India’s first APP POS, which will democratise digital payments. With this, any shopkeeper who has a smart phone and mobile internet can accept debit and credit card payments from customers. Then under ‘Accept Payment’ icon, small shopkeepers and businesses can self-declare their details and provide bank account details to start receiving payments instantly up to Rs. 50,000 a month as stipulated by RBI.
The shopkeeper will generate a bill for the item sold and hand over the phone to the customer for entering card details. The details, entered by the customer will not reside on the app itself, but on the bank’s website, making the process secure.
Isn’t there no fee for all debit/credit cards till December 31 on the App POS?
The credit card fees will be 2 per cent as we have to give a lot of money. Also, RBI has given payment platform on debits cards only.
After demonetarisation, many have switched to Paytm. So, how have you benefitted from it?
The government’s decision on demonetisation has done wonders for us. Every day, we are adding million customers on Paytm. In last 15 days, more than 7.5 million customers have come in. We have also started acquiring more important and critical elements, which are the merchants, shopkeepers, who are now accepting Paytm. Shopkeepers are accepting digital money; because of which we are every day getting thousands of merchants ready to sign up. Now we are signing 50,000-70,000 merchants a day, and India is transitioning into a digital economy.
Tell us about your business model?
Right now, Paytm incurs costs of about 1-2.5 per cent on every transaction users makes on the Paytm network. We earn by keeping a margin of up to 1-15 per cent from various platforms like movie, bus tickets etc.
We as a company don’t look at it as losses, but cash flows. I believe that looking at the current spend pace, we have enough cash to keep us going for next two years. We are currently on investing mode and we see a big market opportunity for us. Any technology company that has made consumer product has never made money in its first five years.
How much do you spend on marketing strategies?
Our annual marketing budget is Rs 500-600 cr and past demonetization, the monthly spend has gone 3x for November.
In 2015-16 fiscal, Paytm spent Rs 2546 crore on marketing and incurred a loss of Rs 1500 crore and made about Rs 1000 crore in revenue having spent Rs 2500 crore in investments.
Which city is the highest Paytm user in India? And what are the most transacted items?
Surprisingly, Hyderabad and Chennai are using Paytm more than Delhi, Bangalore or Mumbai. The big cities are doing three to four tractions in a week, while the smaller towns are doing three transactions in a day.
The most transacted items on Paytm are groceries, QSR and local transport.
In a rapidly evolving digital commerce landscape, Digihaat emerges as a transformative force, leveraging the Open Network for Digital Commerce (ONDC) protocol to empower underserved sellers and expand e-commerce access in India. In an exclusive interaction, Rahul Vij, COO of Digihaat, sheds light on how this buyer application is reshaping the industry by ensuring a fair, transparent, and sustainable marketplace for both sellers and buyers.
Digihaat is an ONDC protocol-enabled buyer application that acts as a front-end interface connecting sellers to buyers. Explaining the platform, Rahul Vij stated, “Digihaat operates like any other buyer application, but its entire supply chain, backend services, and technology stack are sourced through the ONDC protocol. This allows any seller onboarded via ONDC to gain access to a vast digital marketplace.”
Unlike traditional e-commerce platforms, Digihaat does not impose a centralized control over sellers but instead provides them with a democratized ecosystem, where they can independently manage their inventories and sales without paying heavy commissions.
Digihaat is committed to making e-commerce more accessible and inclusive, particularly for small and rural businesses. “The idea is to help sellers increase their audience reach and integrate them into India's digital economy. We align closely with the local for local initiative, ensuring small businesses, entrepreneurs, farmers, and artisans get a fair marketplace,” said Vij.
A key challenge in the current e-commerce ecosystem is the lack of visibility and support for local and underserved businesses. By leveraging ONDC, Digihaat ensures that these sellers are not overshadowed by larger players but receive equal opportunities to showcase their products across the country.
Seller onboarding is facilitated through seller network participants (SNPs), who assist in managing catalogues and deliveries. Vij explained, “These network participants take care of onboarding, managing the catalogue, and ensuring seamless deliveries for sellers. They play a crucial role in bridging the gap between independent sellers and the ONDC ecosystem.”
Currently, e-commerce penetration in India is at just 6 percent, leaving immense room for growth. Digihaat aims to onboard the remaining population through a transparent, efficient, and scalable model. “Our vision is to empower not just buyers but also millions of sellers across India. When a revolution of this scale happens, the ease of selling and buying transforms, much like India’s UPI revolution,” he remarked.
By lowering entry barriers and simplifying digital transactions, Digihaat intends to replicate the success of digital payment systems within the e-commerce space.
Digihaat is aligned with the Make in India movement by promoting local artisans, MSMEs, and traditional businesses. The platform has launched a dedicated section, Amazing India, featuring handicrafts, textiles, and artisanal products year-round.
“Amazing India will permanently showcase various indigenous crafts and self-help group products, reinforcing our commitment to India’s rich heritage. Different festivals and seasons will highlight different crafts, from textiles to handmade diyas and jewelry,” explained Vij. This initiative ensures a sustainable and consistent platform for local businesses to thrive.
Technology is at the heart of Digihaat’s operations. The platform integrates AI-driven solutions to improve seller discoverability and optimize operations.
“We are building a tech-first marketplace that simplifies seller onboarding and enhances buyer experiences. AI will help enhance product visibility and create a seamless experience for both sellers and buyers,” he shared.
Sustainability is a growing concern in e-commerce, and Digihaat takes a proactive approach to addressing this challenge.
“Our open network model removes middlemen, ensuring sellers retain a larger share of their profits. By eliminating unnecessary operational inefficiencies like inventory holding costs and logistics complexities, we maintain a transparent, sustainable, and cost-effective model,” highlighted Vij.
Unlike traditional e-commerce platforms, Digihaat does not impose predatory commissions or hidden fees. The platform's goal is to create an affordable network that benefits both buyers and sellers without inflating costs through deep discounting tactics.
Digihaat evaluates its success based on the number of unique sellers gaining customers, the percentage of first-time buyers, and the overall user retention rate.
“For us, success means empowering first-time sellers and buyers to embrace digital commerce. Our goal is to digitize as many small businesses as possible while ensuring an experience that matches leading e-commerce platforms,” he emphasized.
Digihaat envisions a future where ONDC fosters a truly open e-commerce ecosystem.
“ONDC ensures that once a seller is listed, they can operate independently without paying exorbitant commissions. Digihaat acts as a trusted window for these sellers, giving them the visibility and confidence to reach new digital shoppers,” asserted Vij.
Digihaat is not just targeting Tier II and beyond markets but is a pan-India initiative. Sellers come on board via self-help groups, SMEs, and established brands, creating a universal network where small businesses and major players coexist with equal opportunities.
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