Merchants can accept card payments via Paytm App
Merchants can accept card payments via Paytm App

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.

 

Stay on top – Get the daily news from Indian Retailer in your inbox
Also Worth Reading