Paytm – Dutch Uncles

Paytm’s T+1 Payment Gateway: Cash Flow Settlement Just Got Quicker

Shalmoli Sarkar — Wed, 09 Mar 2022 08:35:10 +0000

Founded in the year 2015, Doodhwala was one of a kind grocery startup that disrupted the unorganised grocery space by introducing a subscription-based service that delivered milk, fresh dairy products, groceries, and other daily essentials directly at consumer’s doorstep. Sadly, the venture failed to take off as its cash flow was severely impacted due to operating on low margins with excessive usage of cashback and discounts.

When we describe that a business is doing good, it is synonymous with having a steady cash flow. Cash flow management is one of the integral aspects of running a business that showcases the financial health of a company and readies for any unexpected or uncalled situation. Most businesses in India grapple with the cash flow issue. According to research done by U.S. Bank, around 82 percent of small businesses shut down due to cash flow mismanagement. For any venture to flourish, cash is the oxygen to a business. Amid the harsh months of covid-19 and lockdowns, around 1107 companies were on the brink of closure, and in 2019-20 3380 companies had wound up the operations due to heavy losses and stuck cash.

Paytm’s new payment gateway of T+1 structure will be aiding online businesses to deal with the irregularities of cash flow.

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According to research done by U.S. Bank, around 82 percent of small businesses shut down due to cash flow mismanagement.

How does the payment gateway in India work?

A question must be popping in mind how can a payment gateway aid in managing cash flows for an online business? The answer lies here. When a customer uses online payment mode through a credit/debit card, wallet, net banking, etc, the payment gateway conveys about the happening transaction to the website, the business owner, and the issuing bank with the help of payment processors and card network. Once the transaction is successful the amount is deposited in the business owner’s account after subtracting the payment gateway charges.

Most payment gateways in India assure a settlement of T+2 days, 2 here is the number of working days required to deposit the amount directly into the bank account of the merchant. But, if there are festivals or weekends, or bank holidays occurring in between it will be added to the minimum settlement period of 2 days, further delaying the process of depositing in the bank. For instance, say a transaction took place on 23rd Jan falling on a Wednesday, ideally, the amount should have been deposited on 25th Jan, now consider that it is a festival day, the bank would remain closed. The following 26th Jan being a national holiday and weekends would take the settlement period up to 6 -7 days.

This results in fewer funds being deposited in the bank and impeding the continuity of business activities such as paying bills, the salary of employees, wages of workers, purchasing raw material, etc. Therefore, faster settlement of transactions is essential for online businesses.

Paytm’s T+1 payment gateway for quick settlements

Paytm’s payment gateway will offer T+1 settlement throughout the year, which will take only one extra day for depositing the amount in the bank. Unlike T+2 payment gateways, Paytm’s payment gateway will take a minimum of one business working day to deposit the amount irrespective of bank holidays and festivals. There will be zero times when the settlement period will exceed 6 days. Instant settlement by payment gateways will help small to mid-sized startups or businesses to better engage with their vendors and suppliers with liquid cash in hand and aid make an advance payment to procure raw materials. Low settlement periods are a boon to the businesses such as online grocery where the inventory turnover demands a continuous restock that requires a steady flow of cash or where the business model involves cash transfers in the form of awards, rewards, cashback, etc.

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Unicorns Launch Investment Arms To Fund Start-ups

Anju Nambiar — Wed, 18 Aug 2021 10:35:07 +0000

The unicorn club of start-ups in India have come a long way and have created history in the start-up world. After successfully filing for IPOs, they are now turning their attention to profitable investments within their community. By doing this, they want to create an independent investment wing for the industry they belong to. Thus, aspiring start-ups who are following in their footsteps can avail funding without the need to approach other investors or struggle to acquire funds.

What is a Start-up Investment Wing?

Start-ups which have raised the benchmark for the community and have reached high valuations are setting up a Venture Capital arm with a fixed corpus. These VCs are then identifying budding start-ups that belong to the same or similar industry and are displaying disruptive business models and million-dollar potential. Such VCs are called Start-up Investment Wings which are giving back to the start-up community.

Why are India’s unicorns turning VCs?

India’s unicorns are turning venture capital investors because the unicorn club in India is steadily growing with 16 more to be added to the pool in 2021 alone. By 2025, the total number of unicorns in India will cross the 100 mark. Existing unicorns in India like Paytm and Dream11 have developed an increased appetite for growth. They have also developed the need to tap into adjacencies which is pushing these unicorns to set up funds and turn investors.

Investment arms of Dream Sports and Paytm

DreamCap – $250 Mn Corpus

Dream Sports, the parent company of Dream11 (fantasy sports start-up) has rolled out a $250 Mn corpus to fund sports start-ups in India. This investment wing of India’s first gaming unicorn Dream11 will fund start-ups operating in the sports, gaming, and fitness tech spaces.

One97 Mobility Fund – $100 Mn Corpus

One97 Mobility Fund is Paytm’s investment wing with a $100 Mn corpus which is investing in mobile-first early-stage start-ups. They have invested in companies like Oorja Analytics, LeapSky Wireless, Ciqual, TenCube, and Singapore-based TheMobileGamer.

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Dream Sports, the parent company of Dream11 (fantasy sports start-up) has rolled out a $250 Mn corpus to fund sports start-ups in India.

What’s in it for me?

Investment wings of top unicorns in India have already invested $1.5 Bn in start-ups. The trend of unicorns investing in other start-ups kicked off when these companies discovered opportunities to invest in seed capital and early-stage funding. However, off-late, these unicorns are ready to invest in lucrative late-stage start-ups as well.

Indian unicorns have achieved the heights of success, making stellar IPO performances, and achieving billions of dollars in valuation. They are making strategic investments in the start-up world and have already invested in more than 90 start-ups.

Popular names in the unicorn club like Zomato, Zerodha, LensKart have invested in start-ups. But what’s common among their investment strategies is that they are funding their own kind of start-ups:

Zomato recently invested in Grofers since they are keenly interested in this segment.
LensKart launched a $20 Mn investment wing called LensKart Vision Fund which will invest in eyewear and eyecare start-ups.

To attract funding from one of these investment wings, your start-up must venture into or belong to one of their close-knit industries. Also, an important thing to note is that these unicorns are mostly interested in start-ups with the potential to become the next unicorns or give rise to the next wave of unicorns in India. ‘Baby unicorns’ with disruptive technology and the potential to reach $100 Mn in revenue in the next few years have a high chance of getting funded by Start-up VC funds.

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PhonePe: Making the Most of India’s Digital Adoption

Muskan Khemka — Fri, 28 May 2021 09:35:04 +0000

While payment apps in India are coming up with new offerings to corner the market, this particular start-up kicked it up a notch. Have you ever heard of a payment app that has its own ATM? This unusual but brilliant move was made by Bengaluru-based start-up PhonePe.

Before we explore this first-of-its-kind offering by the payment app, we rewind six years to when the start-up began its humble journey from a simple digital wallet to its culmination into one of the leading fintech players in the industry today.

Inception 1.0

In 2015, Sameer Nigam, Rahul Chari and Burzin Engineer started PhonePe to cause much positive destruction in the way people look at digital payments. The aim was to develop an app to give an overall new experience to users while ensuring financial inclusion and easy access.

The trio, however, was unsure whether PhonePe would be a payments company or a platform company. The market was transitioning into a phase of digital wallets boom back then. The early entrants – Paytm and Mobikwik – had already gained traction in the crowded e-wallet market at the back of sound funding, cash backs and product development.

In April 2016, National Payments Corporation of India (NPCI), a government-backed consortium of banks, introduced Unified Payments Interface (UPI). Within a few days of this launch, e-commerce giant Flipkart, which was scouting for suitable acquisitions in the payments solutions space, announced its acquisition of PhonePe which saw ‘UPI’ as its golden ticket and was building a payments solution app based on the same.

In August, merely 4 months after UPI’s launch, the PhonePe app was made live. It became the first non-banking entity to launch a UPI app. It was only a year later that Google Pay and Paytm entered the UPI space, but PhonePe had gained the first mover’s advantage.

The start-up took a different approach from how the market was trying to solve the problem of online payments. They did not want to remain restricted in terms of product scalability by building a banking app, a recharge app or a utility payment app. Rather, the aim was to reach a wider audience with a scalable product and maintain inclusivity.

What does the PhonePe app do? It enables transfer of money from one bank to another (UPI allows a customer to pay directly from a bank account to different merchants, both online and offline, without details like IFSC code, net banking passwords, etc). Customers can use the app to pay bills, recharge pre-paid mobile numbers, recharge data card and DTH, send or request money from friends by entering their number, name or VPA, split bills between people, check bank account balance and scan QR codes to pay.

The app also sells products and services like groceries, insurance, food (via product promotion). What is fascinating about PhonePe is its evolution and growth over the past years. Within three months of its launch, over 10 Million users downloaded the app.

In a short span, it has surpassed its peers with over 280 Million registered users. It is processing over 100 Million transactions in a month and an annual total payment volume (TPV) of over $388 Billion, including 17.5 Million merchants across 500 cities.

Going Beyond a Digital Wallet

PhonePe has been in a continuous mode of evolution since inception. It entered the BFSI segment in 2017 by offering gold on its platform in partnership with SafeGold and MMTC-PAMP.

The start-up registered its wealth management division, PhonePe Wealth Services Pvt Ltd., marking its debut into financial services. It dispatched shared assets and protection monetary items like expense saving assets, liquid assets, worldwide travel protection and protection cover for COVID-19 in association with various financial organisations like Yes Bank, ICICI Prudential Life Insurance, Axis Bank among others.

It has now become the largest platform for buying digital gold with a 35% market share.

In the most recent development, PhonePe is planning to foray into stockbroking. The aim is to encourage its existing users to put a fraction of their unutilised funds in wallets into the stock market. This will intensify the battle in the stock market which is dominated by players like Zerodha, Upstox and others.

The fintech company has a vision of becoming a full-fledged diversified financial services player and stock broking is an addition to the same. The expansion and plunge into different categories is also a part of the company’s strategy of monetizing its customer base – offering financial service being one of them.

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PhonePe is processing over 100 Million transactions in a month and an annual total payment volume of over $388 Billion.

Making Inroads in Unorganized Market

In a bid to tap the huge opportunity in the retail market, PhonePe started focussing on Kirana stores owners and small-scale retailers and help them adapt to the new-age style of doing business.

The company has ‘PhonePe for Business’ app, which offers end-to-end control of the payment process, including instant payment confirmations, receipts, and reconciliations and grocery deliveries to Kirana store owners and small merchants.

PhonePe has recently launched its own ATM which will enable people to get cash from merchant partners through transactions with their mobile devices. The company said that the service will enable neighborhood stores to act as ATMs for PhonePe users. At the same time, it will also help merchants avoid the hassle of storing cash and making multiple trips to the bank branch to deposit their extra cash.

The brand is also advertising the SMEs and local shopping brands on its app to raise awareness and help them market their products. The app offers its merchant partners to grow their business by giving them a personalised store page on the app, allowing them to list their store timings, share their product catalogue, and promote home delivery options, thereby reaching out to a much wider customer base.

The app further offers voice notifications in 11 vernacular languages free of cost. This helps the merchants during peak business hours as the app announces the amount received from customers, saving all the time to check the customer’s phone screen or wait for a bank message.

PhonePe at present has 13 Million merchants on its platform and it is accepted as a payment option at over 17.5 offline and online merchant outlets across 500 cities.

The company has come up with a Bluetooth-enabled Point Of Sale (POS) device that is indigenously designed to help merchants of all sizes – be it local kirana stores, petrol pumps, food chains or quick service restaurants to help accelerate digital inclusion at all levels.

PhonePe was one of the first fintech companies to identify the needs and demands of the local merchants who are not equipped with technology like the big retailers, hence the POS device. This device works like a traditional calculator which is cheap, easy to use and highly durable, something a merchant would be interested in.

The App’s USP

PhonePe user interface is simple and easy to use even if one has never made a digital transaction before. This makes it a Unique Selling Proposition (USP) as different age groups of people are often challenged while making online payments and revisit its adoption unless out of compulsion.

This is an important feature in such a highly competitive and crowded payments app market. The app, since inception, was kept simple and hence scalable to incorporate more verticals, especially in the context of Kirana store owners and small retailers who might not be well-versed with digital mediums.

There is an ease of looking up terms, navigating across pages and options besides strong privacy measures on the app. In terms of users’ experience, it ranks at the top, in comparison to its peers – Paytm, Gpay, Razorpay and Instamojo.

The company also introduced a separate chat service for users and merchants in over 11 Indian languages to further smoothen the user experience.

In 2018, the start-up had launched Switch which offers more than 260 mini web applications and allowed users to switch between various apps, including travel, grocery, food and shopping, within the PhonePe app.

This innovation turned out to be unique as users do not have to download and install all these apps individually on their phones, they can easily access the services from Switch without any additional convenience fee or charge. This further added to the app’s USP of ease and comfort and created a superior product experience.

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PhonePe user interface is simple and easy to use even if one has never made a digital transaction before.

Clash of the Titans: Paytm vs PhonePe vs Google

To date, PhonePe is cashing on its first mover’s advantage. The start-up defeated Google Pay in terms of market share between November and January 2021 and became the top UPI mobile app. The company processed 968.72 Million UPI transactions involving nearly Rs 1.92 lakh crore in January 2021.

The duo dominate the UPI apps market and have over 75% market share together. Paytm Payments Bank app, on the other hand, stands third followed by Axis Bank app and Amazon Pay.

The technical glitches faced by the banking partners of Google Pay and the government-mandated cap on UPI transactions, boosted the number of UPI transactions for PhonePe and Paytm as customers moved away from the former.

However, this cannot be credited as the sole reason for PhonePe’s lead in the sector. The start-up has been aggressively investing in its offline merchant base which has increased its user base and transactions besides its massive adoption in Tier 3 and Tier 4. Both PhonePe and Paytm have been adding more use-cases, growing the overall UPI ecosystem.

The Spin-Off

In December 2020, Flipkart divested PhonePe into a separate unit and partially sold its stake to its parent company, Walmart. PhonePe came under Walmart post Flipkart’s acquisition but continues to retain majority stake in shareholding pattern. The acquisition saw a rising growth of PhonePe as a brand.

At present, Walmart is considering spinning off the start-up to give the company more flexibility and freedom to pursue its development and get access to dedicated capital for its long-term goals. The partial spin-off will bring new opportunities for the start-up as it will be able to raise more primary capital, giving autonomy to operations.

PhonePe has come a long way since its inception from starting as a digital wallet to becoming the leader in UPI transactions.

As per the founders, the start-up aims to be profitable by 2022 and go public in 2023. The company bagged $700 Million from Walmart and other existing investors and another $21 Million from Flipkart, which still holds 87% stake in PhonePe, in December 2020. The post-funding valuation stood at $5.5 Billion.

Product innovation, diversification (fintech market) and the company’s mass-market focus (reach beyond metros) will continue feeling its future growth.

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Start-ups focus on employee wellbeing during second wave of the coronavirus pandemic

Anju Nambiar — Wed, 05 May 2021 11:05:03 +0000

Start-ups are taking Covid-19 head on. Several start-ups have stepped up efforts to create a safety net on their employees during the killer second wave of the pandemic sweeping across India. The focus of these start-ups has been to provide help and assistance where it’s needed the most – their employee fraternity. From creating Covid-19 funds for employees, providing employee wellbeing benefits and financial support for Covid affected employees and their families, start-ups seem to be doing more for their employees than the Government is doing for its people.

Precise employee wellbeing benefits offered.

Start-ups are providing financial assistance to cover covid-related expenses. Funds are being raised to extend physical and mental health care as well as insurance cover. Salary advances are being handed out and arrangements are being made for vaccination drives for employees and their families.

Home medical equipment like Oxygen Concentrators is being stocked for team members, their families, and communities.

Several Covid-19 related employee benefits are being rolled out whereby corporates and start-ups are offering to bear the expenses of vaccinations and are organising vaccination camps on their premises.

Start-ups are also expanding the umbrella of coverage for Covid-19 in their group insurance plans. Employees are getting extra time off to connect with mental health services.

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Start-ups are providing financial assistance to cover covid-related expenses. Funds are being raised to extend physical and mental health care as well as insurance cover.

Start-ups in the spotlight

Paytm is the first start-up in the spotlight which has purchased home medical equipment for the families of team members. Impetus Technologies has initiated an in-house, free, cooked meals service for their employees suffering from Covid-19. CapitaLand India is a real-estate firm working to inoculate their employees by arranging vaccination drives.

Oyo is the next start-up in the spotlight which has prioritised employee wellbeing during the second wave of the pandemic in India. They have come up with new policies starting from vaccination cost reimbursements for employees and their kin. They are doing much more for their employees under preventative wellness exercises to keep them safe. Oyo employees will benefit from free annual health checks, online consultations, 24×7 counselling services, and more.

What’s more, Oyo is setting aside INR 25000 for families of employees who are home quarantining. The company will be reimbursing expenditures on RT-PCR tests, pulse-oximeters, thermal scanner, administration of oxygen, and more.

Byju’s on the other hand has established a CEO fund of INR 20 Cr. Specially for bearing Covid-related medical expenses for employees and family.

What’s in it for me?

Start-ups are doing all they can to contribute their bit towards India’s death rattle against Covid. It seems like Work from Home will be the permanent norm henceforth, since most start-ups who had reopened offices have gone back to the remote work format.

All businesses are extremely precautious about ensuring that their staff follows all Covid-19 protocols. In-office staffing is almost nil, and employees are being persuading to not leave the safety net of their homes during these trying times.

Start-ups no longer need to think about investing office spaces since the hybrid workplace model is here to stay. Real estate and travel expenditures can be wisely and judiciously utilised for extending employee wellness benefits and preventive measures so that employees can comfortably and safely work from their homes.

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India’s Number 1 Unicorn Paytm is IPL’s Umpire Partner: What Would Business Be for Paytm the Next 5 Years

Smruthi Krishnan — Sun, 21 Mar 2021 06:35:05 +0000

The Board of Control for Cricket in India (BCCI) partnered with digital payments Fintech platform Paytm announcing them as the Official Umpire Partner of the VIVO Indian Premier League for the next five years in 2018. A recent addition to the unicorn club, Paytm is also the Title Sponsor of India Cricket. Cricket has played a key role in the development of Paytm’s brand expanding its reach across the country and increasing their user base.

Paytm, Cricket and IPL

In July 2015, Paytm acquired the title sponsorship rights for India’s domestic and international cricket matches at home for a period of four years starting in August 2015. This included sponsor branding of the series with the title sponsor logo, designation as the title sponsor of the series, visibility at the stadium, broadcast sponsorship rights and all BCCI domestic matches in India like the Ranji Trophy. Paytm also acquired sponsorship rights during the 8th season of Indian Premier League. It has also served as an associate sponsor on Sony TV network and was the official partner of the IPL team Mumbai Indians. Currently, they are the Official Umpire Partner of the VIVO Indian Premier League.

Growth Prospects for Paytm in the next 5 years

The IPL is one of the most-attended cricket leagues in the world and was ranked sixth by average attendance among all sports leagues in 2014. With such high viewership, Paytm has had the opportunity to tap into an extensive network of users across the country and the globe.

Going forward, Paytm plans to focus on SME and merchant sectors to make its brand more inclusive and expand its client base as the SME sector is a vast market. They also plan to invest around ₹10,000 crore over the next three years to expand financial services especially their offline merchant base.

Paytm aims to add around 10 million merchants to their platform over the next 12-18 months in addition to their current network of over 16 million merchants.

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With 450 million registered users, 130 million active users, 60 million bank accounts, 220 million saved cards, Paytm has a daily average of 5 million transactions with an average of 18 weekly transactions per user.

The new all-in-one payment gateway and business solutions as well as an Android-based point of sale (POS) machine has made the brand more client friendly and convenient.

As the payment gateway market is gradually booming, with government initiatives helping enhance the digital payment space, the economy is moving to become a cashless landscape. Paytm has already become a pedestal platform, and strives to tap more into the digital payments market.

With 450 million registered users, 130 million active users, 60 million bank accounts, 220 million saved cards, Paytm has a daily average of 5 million transactions with an average of 18 weekly transactions per user. Monthly transactions via Paytm average to over $4 billion and the number is only increasing. They witnessed a 3.5X growth amidst the pandemic as the brand shifts its focus to scalability and customer loyalty.

Post pandemic, several individuals are in need of credit and several companies are recovering and rebuilding. This would increase the credit side exposure of Paytm by at least 10 fold in 2021 according to Paytm. The unicorn is flying high and aims to fly higher in the near future, for as they say, the sky’s the limit.

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Paytm Mall: Taking Online Shopping a Step Further

DU Desk — Tue, 02 Mar 2021 12:35:03 +0000

As far as online shopping goes, it has become an ever-present part of our daily lives as the pandemic just keeps on coming in waves. With the evolution of a growing digital presence in our lives and the need to have it all online, from schools to jobs, it only makes sense that we added shopping to that list. True, online shopping and the realm of e-commerce is nothing new to us but Paytm Mall is a relatively new player to the game and has a lot to offer as an e-commerce platform.

What is Paytm Mall and How Does It Work?

Paytm Mall is an E-commerce platform and marketplace that helps customers find the latest in products from over 1.4 Million sellers that are connected and verified on its platform. These products are provided online at the lowest or best prices. The platform is a brand-off or wing of the main Paytm brand and is responsible for a large sum of its revenue.

Paytm Mall operates on the premise of providing its customers with the best deals, offers and cash backs. The e-commerce platform has everything on there from bikes and electronics, to food and clothing. It is essentially one giant bazaar.

Yes, the company is dedicated towards online shopping like any other e-commerce app or website and performs much of the same services when it comes to delivering the products to its customers, but it does stand apart from the rest in a few ways. For one, it does not deal with options like bill, recharge, payment, utility bills or any other money-related activities like the main Paytm app, instead, it is a standalone brand in its own right. Secondly, since it does come under the ambit of the Paytm banner, customers can use their integrated Paytm wallets to conduct said purchases in an easy manner. In that sense, Paytm Mall is special as it exists within its own brand silo and all of the service extensions are self-provided with no third-party thrown into the mix.

While customers do get the option of paying through Debit/Credit Card, Netbanking or Cash on Delivery, the Paytm Wallet just showcases that extra level of convenience that the platform provides its customers.

Paytm Mall was launched in 2010 and was inspired by and modelled after China’s largest business to consumer (B2C) retail platform, TMall. The aim was to give Indian customers a combination of the mall and bazaar that helped spread the reach of the customer-base as wide as possible as it would have something for everyone.

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Paytm Mall is essentially a large e-commerce platform that was launched with the aim of promoting the digitisation of brick-and-mortar vendors and sellers through a single platform.

Why is Paytm Mall successful: Key Features

Paytm Mall is available in two broad formats, the website catalogue and the mobile application. Though the functionality might vary ever-so-slightly, the core concept of the platform is perfectly mirrored in both the app and website. At its core, the platform aims to bring shopping to your fingertips in a quick and hassle-free manner and have your purchase delivered to your home. With all that in mind, here are some of the features and reasons why Paytm Mall is successful:

A Hybrid Model: Emphasis on Diversity

As mentioned earlier, Paytm Mall follows a hybrid model of a Mall and Bazaar which means the variety of products available are very diverse. The wide range of products are classified under the following categories that Paytm Mall maintains:

- - Electronics
  - Mobiles and tablets
  - Health and grocery essentials
  - Protect yourself
  - Beauty and grooming
  - Men’s fashion
  - Women’s fashion
  - Home and kitchen
  - Books and stationery
  - Toys and kids store
  - Bags and luggage
  - Sports and fitness
  - Cars and bikes store
  - Automobile accessories
  - TV and appliances
  - The Vibe

One thing that both sections have in common is that they are sourced from high-end brands and sellers at the best market prices so as to make their wide inventory more accessible to a greater percentage of their customer base.

User-Friendly

Standing as one of the largest e-commerce and e-retail platforms in India, interactivity and usability is everything that is retaining customers. That is why Paytm Mall has ensured that the simple interface and fast-loading platform provides an experience that is as smooth as possible.

Also considering how wide the range of products are on the platform, the company has provided customers with a very streamlined series of filters and relevant search options that make finding the ideal item at the ideal price-point that much easier. Making the app and platform so easy to navigate means that customer engagement and retention goes up.

Safety and Security

Paytm Mall maintains the same level of security and privacy of information as its parent brand Paytm. Given that the Paytm group is recognised as a secure method of conducting financial transactions by RBI (The Reserve Bank of India), it only stands to reason that Mall is also a secure platform.

Each and every payment conducted through the mall is secured through Paytm’s Wallet feature which is a great, self-contained transactional ecosystem. Speaking of transactions, customers can choose from a wide variety of options when it comes to payment, which includes Credit/Debit Cards, Net banking or even UPI. Giving customers options to choose from that makes them feel secure with their financial and personal details is a great way to not only build customer retention but to grow brand loyalty and trust. A brand that customers trust, is a brand that succeeds.

Better Oversight and Transparency

Paytm Mall has recognised and addressed a very serious issue when it comes to online purchasing, which is a lack of product oversight for the customers. Many times, customers will run out of options and purchase an item based on one low-quality image that is there and a few lines describing the product. To circumvent this issue, Paytm Mall provides its customers with clear, high-quality images and a thorough description of the product before they purchase it. This drives up customer satisfaction and brings down the rate at which products are returned or refunds are asked.

Additionally, to keep track of all the purchases and order statuses, one simply needs to go to the ‘Order History’ section where you can keep track of your delivery, returns, replacements and so on. If all this fails and you are still facing hurdles the platform has a 24×7 customer care line that can help address any and all queries or issues regarding orders. This customer-forward approach is a great way to build brand loyalty and trust, a core factor in the success of Paytm Mall.

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Paytm Mall stands out in the heavily saturated e-commerce industry for its attempts to bring SMEs into the digital realm which makes up such a large portion of the country's economy.

What Sets It Apart from the Crowd?

If you look at some of the biggest players in the market like Amazon or Flipkart, at first glance it might strike as a similar platform to Paytm Mall, but that is the furthest from it. While the big brands focus on bolstering their online presence, Paytm Mall is going against the grain and has built a platform that is centred around technological convenience and empowering real-world sellers through its unique O2O (Online-to-Offline) approach. Yes, the brand is all about online purchasing but it also serves the dual purpose of enabling purchases through the app in real-life brick and mortar shops which drives in more foot traffic for sellers and vendors who are partnered with Paytm Mall.

So, in a way, the platform is very seller oriented as well. Another facet that sets Mall apart from other potential competitors out there is the storage and inventory facilitation. While many of the sellers and brands who partner with the likes of commercial brands like Amazon need to maintain their own storage and warehouses for their inventory, Paytm Mall provides these storage facilities to their partnered sellers via third-party storage centres. This acts as a massive cost-saver for the small-scale sellers who are looking to expand their reach through the platform.

This approach of bringing brick-and-mortar stores and offline shopkeepers together onto a diverse and digitised platform is very crucial in this day and age as it not only brings in more foot-traffic for their businesses, it pushes these brand and businesses towards the digital realm that is becoming more and more active and relevant by the day. A large part of the Indian economy consists of these small and medium enterprise businesses. So much so that MSMEs contribute an approximate 37.5 per cent of the country’s total GDP according to the SME Chamber of India.

How It Stays Afloat: Revenue Strategy

The platform has a few but key points of revenue that stand as the foundations for its operations. Again, this comes back to a sort of self-serving mechanism. The company charges its partnered vendors an estimate of 5 per cent to 20 per cent of the products sold through their platform. This, added to the leveraging of the O2O platform model has saved the company an estimated 35 per cent in revenue and expenditure.

Paytm Mall also earns a lot of revenue through charging for advertising on the platform, shipping charges and even mutual funds.

On top of all these streams of revenue, the company is also backed by some of the largest investors in the start-up game. Some of the backers were SoftBank, Alibaba, SAIF and Ant Financial, and recently eBay. With a gross valuation of $ 2 Billion as of 2019, it is a clear entrant into the unicorn club and a rapidly expanding one at that.

The financial aspects aside, one of the main reasons that Paytm Mall has risen to the top ranks of its respective industry, is due to a strong brand strategy and approach. When considering the Indian e-commerce market, there are a lot of options, but the majority of those options, even if branded, are from unmarked sellers or vendors. For one, there is no physical presence in the online shopping world, now add to that the fact that you do not know who these vendors are and whether they are selling the authentic article or a cheap knock-off, and you have yourself a breeding ground for mistrust.

Paytm Mall addresses this concern by providing a very strict set of guidelines as per which vendors and sellers are verified before they are permitted to sell on the platform. Of course, it does not hurt to have the Paytm brand banner to stand behind as it is one of India’s largest and most used online payment gateways.

In conclusion, Paytm Mall stands above the crowd as a result of its unique industry-disrupting tactics. Where the competition is focusing primarily on digital development, Paytm Mall is focused on the sellers and vendors who do not have an online presence and giving them one. It is the integration that provides innovation in this scenario. Empowering such a large segment of the economy and sustaining a multi-pronged approach of streamlined servicing, diverse product inventory and customer-forward convenience is what makes Paytm Mall such an industry disruptor. What started as a simple online catalogue and a branch-off of the infamous Paytm brand banner, now stands as an independent company that is setting the precedent for the world of online shopping in India.

For more stories like this check out our Inspire Section.

The post Paytm Mall: Taking Online Shopping a Step Further appeared first on Dutch Uncles.

Fintech At Its Best: Paytm, India’s Biggest Unicorn

DU Desk — Sat, 13 Feb 2021 04:35:02 +0000

Going back more than a decade, you could not even fathom reaching for your phone to make small payments at the local tea shop or grocery store, now the phone replaces the wallet for most Indians. This is all thanks to Paytm, a single brand, a unique product that has revolutionised the fintech sector and started a path to future where e-retail and phone-based transactions is the new normal.

Paytm’s Origins and Entry to Fame

The concept of ‘Pay Through Mobile’ or Paytm was coined by Vijay Shekar Sharma when the brand was established in 2010. The origin for Paytm, however, dates back all the way to 1997 when Sharma sold his first entrepreneurial website ‘Indiasite.net’ and with that money raised as well as a Rs 8 lakh loan, he officially founded One97 Communications in 2000 – Paytm’s parent company.

The digital platform found its genesis in the fintech sector as an Indian e-commerce platform and mobile app that allowed for the payment of small-scale utilities, DTH recharge and the occasional shopping bill. With the increased penetration of smartphones in the country, the app and website have become the face of e-retail as well as mobile-based financial transactions and booking for the majority of Indians. Over the years the range of services that the app and brand cover is wide enough to include most needs. For example, you can transfer funds to bank accounts, pay the electricity bill, book train/bus tickets, make hotel reservations, buy FASTags, get insurance quotes and even do online shopping through Paytm’s Mall (which is an e-commerce platform).

In terms of the clout that Paytm has garnered over the years, it is fair to say it is a considerable amount. Paytm Bank has over 58 million account holders. Paytm Money, a subsidiary platform, is one of the biggest investment platforms in India and a big contributor to the Mutual Funds Industry by way of the Systematic Investment Plans (SIP). Paytm’s platform is one of the few to receive backing and recognition from the Reserve Bank of India (RBI) as a legitimate and secure method of digital transactions.

This in itself gives the brand a lot of strength to its name and has pushed its name to the forefront of the fintech sector, now coming in at a valuation of $16 Billion. Even with big players like Google Pay and PhonePe, Paytm still remains one of the most reliable and versatile e-wallets and e-commerce platforms in India. So much so, that you have most likely heard the phrase, “Paytm Karo” at least once. A fun and catchy jingle that is somewhat of a viral sensation, becoming synonymous with mobile transactions.

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Paytm was a pioneer in the fintech sector with its revolutionary approach to e-retail and e-commerce as it provided an easy-access platform to all things banking and online transaction related.

Reasons Behind Paytm’s Success

Paytm was successful for a number of reasons, at the core of which stood their accessibility and status as one of the first digital banking and e-retail apps that anyone with a smartphone and internet plan could access. One of the biggest events for the brand was in 2016 when the government of India initiated the demonetisation of large currency notes in the country in an effort to curb the black money that was in circulation. This move essentially pushed citizens to opt for a cashless lifestyle, at least temporarily till normalisation could be achieved. It was following this that Paytm jumped on the bandwagon for #CashlessIndia and #CurrencySwitch, which gave the Alibaba-backed platform a lead over its competitors.

The other reason why the Paytm brand and platform are so popular as a product is the cornucopia of features and options it provides for its users:

Paytm Payments Bank

This feature gives customers all the functionality of a real bank account but a bank you can carry in your back pocket. Customers who make use of this can open a Zero Balance Account with a 2.75 per cent Interest, gain an Automatic Fixed Deposit (FD) with a partner bank when the balance exceeds Rs 1 lakh with an interest rate of 6.50 per cent, experience unlimited and free bank-to-bank money transfers, get a free digital Debit Card for all online shopping purposes and even get a Debit/ATM card with RuPay Platinum benefits.

Paytm Mall

This is a Paytm sub-service and an online catalogue of over 140,000 enrolled sellers that work on a B2C that is loosely based on China’s biggest B2C retailer TMall. Each merchant has to go through Paytm-guaranteed stockroom and channels to ensure buyer trust. Anything from cars and bikes, to clothes and household appliances, can be purchased here. The mall is primarily funded by Alibaba and SAIF Partners.

Paytm Money: Stocks & Mutual Funds Investment App

This is a sister app to the main Paytm e-wallet app which allows you to specifically operate a Demat Account, buy and sell stocks on NSE (National Stock Exchange) and BSE (Bombay Stock Exchange), access NPS (National Pensions System) and even invest in Mutual Funds. This platform offers customers a streamline arena to buy and sell with live NSE and BSE trackers, in-app market research and data schematics etc.

Paytm Digital Gold

This sub-platform is fully dedicated to the investment, purchase and sale of gold. The brand cleverly recognised and made use of the cultural and ritualistic importance of gold amongst the Indian demographic. Clients can get their own Gold Bank Accounts and start investing in the gold market. This is also a feature under the Paytm Money application.

Paytm Mini App Store

This is an innovative approach by the company which offers customers all the user experience of an app store, without the tedious processes of downloading and installing apps to gain access. Instead, it acts as an online directory of services that customers can access and redirect themselves to different corners of the internet to access said services. The categories that the store covers are gifting, food ordering, shopping, games, transport and travel booking, music, healthcare, news and content and even education to name a few.

Essentially the prime reason for the success remains the demonetisation of the large currency bills in India, as well as Paytm’s far-and-wide-reach tactics that cover so many elements of the e-commerce and e-retail sector from insurance, investment, bookings, recharge and online shopping. It was a pioneer in its field as an e-wallet in the Indian context.

How Is Paytm Miles Ahead of The Competition?

There are a number of reasons why Paytm is ahead of the competition, even after all these years and an ever-increasing saturation point in the fintech and e-retail sector. Industry mammoths like Google Pay and PhonePe are among the heavy-hitters in the fintech sector that Paytm has to contend with. The reason as to why it outperforms them is that, while the competition is so heavily focused on bolstering their cashback strategies, Paytm is diverting its funds to as many small businesses and merchants as possible in an attempt to gather them under the brand’s umbrella.

This combined with the company doubling its efforts to introduce better IoT (Internet of Things) devices, will enable small businesses and merchants in tier-two and tier-three cities to easily accept digital payments and make their lives easier.

As of November 2019, Paytm was active in the merchant community in over 2000 cities and towns and 650 districts. The reason that they are able to so readily bring merchants into the fold is that merchants using the app can receive money into their e-wallets without even having a bank account. They can then spend this money at other merchants who operate on the Paytm platform. Effectively, this strategy creates a network within a network and helps bolster the merchant demographic. This was also a crucial focal point in the days following demonetisation when banks were flooded and overwhelmed and businesses were in need of a method that allowed them to conduct transactions with cashless payments.

This heavy boots-on-the-ground approach really helps keep the brand accessible and people-centric which is one of the reasons that the brand is leading the pack.

Another reason why the brand has come so far ahead of the competition, in terms of popularity, is the approach they implemented in their brand awareness campaign. Paytm’s approach is essentially a copy of PayPal’s strategy which was used to incentivise users to spread the word to non-users and in exchange, the non-users will get a cash reward and Paytm gets cheap advertising. After seeing the success of the cashback incentive scheme, the competition followed the lead and started doing the same. Having said that, there is an advantage here as the one who did it first did it best.

Beyond the schemes and networking, if you look at the design and layout of the app you will find that there is, in fact, no obvious logout button or option. It is there, it is just buried deep within the app’s design. The reason this works in Paytm’s favour is that users will most often just remain logged in, which means less time and energy spent trying to input passwords or pin codes and more time doing the actual transactions and staying active on the app. This makes for a very efficient process for the day-to-day usage and drives up the customer engagement numbers for the company.

Above all this, however, the core of why Paytm is at the top of its game in the fintech sector is a combination of having been the first to recognise a gap that needed closing, effectively marketing and networking with the backbone of the Indian economy (SMEs and merchant businesses), covering a wide array of services as mentioned above and of course, making for a democratised e-retail and e-commerce platform which gave easy access to the market, stocks and digital banking/payments for the average person.

Although the competition is slowly catching up, Paytm has the financial backing, the strategic skills and the years of experience under its belt to keep its head above these competition-heavy waters.

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It is one of the few and first mobile applications to receive recognition from the Reserve Bank of India as a safe and secure platform for consumers to conduct their transactions on.

To Sum Up

The application found its beginnings as one of India’s first mobile-first consumer service e-commerce and retail platforms in the fintech sector. Though initially it was meant for small scale utilities, DTH recharge and grocery shopping, the application saw a boom in popularity thanks to its ease of access and usability. It was a pioneer in its field.

Though investors were not too keen on this kind of concept coming out the gate, given that India’s telecom infrastructure was still developing in 2010, Sharma spent out of his own pocket in order to bring this idea to life. All these efforts brought the application and the brand to the forefront as digitalisation, the smartphone penetration and demonetisation took hold of the country, which further served as the cornerstones upon which the expansion of the brand was built.

Going forward the brand will most likely be playing a more intensive role in the SME and merchant sectors to involve more small businesses under its brand umbrella as they constitute a large chunk of the market ecosystem in India. This will only further open doors to the brand as new opportunities and venues present themselves to be bridged while the competition is left to play catch-up.

For more inspirational brand and product stories like this check out our Inspire Section

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