20 Things You Didn’t Know about Paytm

Digital Banking

Paytm is an Indian digital payment system and financial technology company that aims to make online payments easier and quicker by allowing users to pay for everything from electricity and gas to movie tickets and flights via their phones. Since its inception in 2010, it’s grown at a phenomenal rate, becoming a market leader in the majority of the categories in which it operates. In June 2021, it confirmed plans to launch what’s anticipated to be the biggest IPO India has seen in decades. Find out more with these 20 things you didn’t know about Paytm.

1. It’s the flagship brand of One97 Communications Ltd

Before Paytm, there was One97 Communications Ltd, a mobile internet company established by Vijay Shekhar Sharma in 2001. Sharma, a graduate of Delhi College of Engineering, had already achieved huge success, having launched and sold his first business, indiasite.net, for a cool $1 million before he’d even graduated college. Even so, the early years of One97 Communications Ltd were rocky, with Sharma being reduced to taking on multiple part-time jobs to keep up with the company’s loan payments. But his perseverance paid off. One97 Communications Ltd in now the leading mobile-internet company in India, with Paytm serving as its flagship brand.

2. It was founded in 2010

Paytm was founded in 2010 by Vijay Shekhar Sharma. As businessinsider.in notes, Sharma had become increasingly aware of the paradigm shift from paying bills at physical outlets to online payments. Mobile phones were getting cheaper, access to the internet was increasing, and the opportunities within the digital payments ecosystem were endless. After putting up around $2 million of his own money in collateral, he launched Paytm as a prepaid mobile and direct-to-home (DTH) recharge platform that allowed people to transfer money, quickly, easily, and at zero charge. It took off, and before long, Paytm had begun adding more and more products to its portfolio.

3. It’s gone international

In 2017, Paytm, which has its headquarters in Noida, India, made its first international move when it entered the Canadian market. Just over a year later, it decided to increase its global footprint via the introduction of ‘Paypay’ in Japan.

4. It’s grown at a phenomenal rate

Since its inception, Paytm has grown at a phenomenal rate. In August 2014, it had 11.8 million users. By the same time the following year, it had over 104 million customers regularly using its services. In 2017, it became the first payment app in India to exceed 100 million app downloads. It now has over 450 million registered users and 20 million merchants.

5. Paytm Wallet launched in 2014

One of the first major new products launched by Paytm after its inception was Paytm Wallet. Conceived in 2014, it quickly gained a foothold in the market when Indian Railways and Uber added it as a payment option. Buoyed by its success, the company soon started to add further products to its portfolio. These days, it can be used to pay for everything from gift cards to rail bookings, education fees to flight tickets, metro recharges to utility fees. Since 2018, it’s offered merchants the opportunity to accept Paytm payments directly into their bank accounts at no cost and, further to the launch of the “Business with Paytm” App, the ability to track their payments and day-to-day settlements.

6. It got into gaming in 2018

By the end of 2017, Paytm had become the biggest app in terms of downloads in India. But its ambitions didn’t stop there. Determined to increase its offering and attract even more users, its next step was to get into gaming. In January 2018, it teamed up with the Alibaba Group-owned gaming company AGTech Holdings to launch the mobile gaming platform Gaming. Subsequently renamed Paytm First Games, the app builds and publishes games that can be used by gamers across both Asia and North America. It’s now India’s go-to gaming site, catering to millions of users with its exhaustive compilation of games.

7. It’s on a mission

Paytm has a mission. It may not have triggered the digital revolution in India, but it’s certainly been at its forefront, attracting more customers and more merchants than almost any other equivalent platform. But it’s not done yet. According to its mission statement, it aims to attract over 500 million unserved and underserved Indians to the mainstream economy. Given that it already has over 450 million users, it’s well on the way to achieving its goal.

8. It teamed up with Starbucks during the pandemic

As livemint.com notes, Starbucks has usually been shy in partnering with digital payment firms, but extreme situations call for extreme solutions. Last year, the coffee chain made the unprecedented decision to team up with Paytm to quickly scale up its contactless-dining solution during the grips of the COVID pandemic. Rolled out over 180 stores, the partnership aims to promote social distancing while still giving people the opportunity to indulge in their daily cup of java.

9. It’s secured several major sponsorship deals

In 2015, Paytm’s parent company, One97 Communications, secured its first major sponsorship deal in the form of a four-year deal that gave it sponsor branding rights for India’s domestic and international cricket matches. According to Wikipedia, the deal included designation as the title sponsor of the series, visibility at the stadium, and broadcast sponsorship rights. Over the years, Paytm has also served as the official partner of the IPL team Mumbai Indians, the associate sponsor on Sony TV network, and the Umpire Partner of the IPL.

10. It has a mall app

In 2017, Paytm launched the Paytm Mall app. Inspired by the Chinese B2C retail platform TMall, it allows users to shop in confidence from a range of registered sellers who’ve all passed through Paytm-certified warehouses and channels. To support the endeavor, the company set up 17 fulfillment centers across India and partnered with more than 40 couriers. Advertised as a “quick, convenient and trouble-free” way to shop from home, it now ranks as the leading online shopping experience in India.

11. It had a fallout with Google

In 2020, Paytm and Google had a major falling out after the internet giant briefly unlisted the Paytm app from the Google Play Store after it alleged it had violated the Play Store’s gambling policy. Paytm hit back, claiming Google had given no prior warning of the delisting and no opportunity for the firm to explain that its ‘cashback’ offer (which was at the root of the problem) was no different from Google’s own payments app, Google Pay. Fortunately, the matter got resolved before it starting impacting Paytm’s growing customer base.

12. It launched a lawsuit against Indian telecom companies

Paytm hasn’t been immune from the occasional legal battle over the years. In 2016, it faced up to its first court case after PayPal launched a lawsuit that claimed the color combination of Paytm’s logo was similar enough to its own to warrant a trademark infringement. Four years later, Paytm launched a lawsuit of its own against Indian telecom companies for failing to block numbers used for phishing activities, a cybercrime in which people are contacted by someone posing as a legitimate representative of a company in an attempt to lure them to give up sensitive data such as credit card information or passwords. According to republicworld.com, the petition contended that the telecom providers were in violation of their obligations under the Telecom Commercial Communications Customer Preferences Regulations.

13. It’s been accused of violating user’s privacy and policies

In 2018, Paytm found itself in murky waters when the investigative news agency Cobrapos released a video showing Paytm’s vice president, Ajay Shekhar Sharma (who was later claimed to have close ties to the ruling Bhartiya Janata Party), alleging the company had released the personal data of Paytm’s users to the Indian government in a violation of user’s privacy and policies. Paytm responded by denying the infringement, saying that anyone who claimed they’d been requested to release user information to the government was not authorized to speak on behalf of the company.

14. It helped out during the pandemic

During the peak of the pandemic, many companies across the world pitched in to show their support, Paytm included. As well as launching a scheme to contribute ₹10 to every user of their PM CARES fund, Paytm employees contributed by donating their salaries to the cause. Thanks to their efforts, they were able to donate 21,000 oxygen concentrators to the 13 worst affected cities in India.

15. It’s an award winner

You don’t get to become India’s biggest and most exciting start-up in decades and go unnoticed. Since its launch, Paytm has been garlanded with numerous accolades, including the title of “Outstanding Startup of the Year” at Forbes Leadership Awards in 2016.

16. It has its own bank

In 2015, Paytm decided to add a further dimension to its offerings in the shape of a bank. After obtaining a license from the Reserve Bank of India, it launched Paytm Payments Bank. The bank, which offers a savings account with zero account fees, no maintenance chances, minimum balance requirements, and no charges for online transactions, was launched in 2017 as a subsidiary of One97 Communications. Although it’s been successful, it’s yet to achieve its aim of 1,00,000 banking outlets across India.

17. Berkshire Hathaway invested $300 million

Berkshire Hathaway is the eighth-largest public company and the largest financial services company by revenue in the world. Its CEO and Chairman, Warren Buffett, is widely considered to be the world’s most successful investor. As Investopedia says, when Buffett talks, markets move based on his words. So when Berkshire Hathaway makes an investment, the world sits up and takes notice… as it did in 2018 when the conglomerate invested $300 million in Paytm.

18. It understands the art of fundraising

As entrackr.com says, Paytm knows the art of fundraising a little better than any other Indian unicorn. Berkshire Hathaway’s investment of $300 million may have been big news in 2018, but subsequent funding rounds have proved no less newsworthy. The latest funding round in November 2020 saw the company raise a massive $1 billion at a valuation of $16 billion. The round was led by US asset manager T Rowe Price along with existing investors Ant Financial and SoftBank Vision Fund. Based on both this and previous rounds, founding CEO Vijay Shekhar Sharmanow owns 14.67% of the company’s shares, the Ant Group owns 29.71%, SoftBank Vision Fund owns 19.63%, SAIF Partners owns 18.56%, AGH owns 7.18%, Berkshire Hathaway owns 2.76%, and the remaining 7.49% is shared between a number of small investors.

19. It’s about to go public

Paytm is one of the most successful start-ups in India. As its success has grown, so has speculation about its future. This June, CEO Sharma put an end to the rumors by confirming his plans to take the company public. In July, he filed a draft red herring prospectus to raise Rs 16,600 crore (approx. $2.2 billion) for the IPO. According to indiatimes.com, several of the company’s major shareholders are expected to dilute their stakes through the OFS at the public offering. The IPO, which is likely to open this fall, will be one of the biggest Indian IPOs in dollar terms since Coal India debuted at $3.3 billion in 2010.

20. It’s lost its luster but not its allure

Over the last few years, Paytm has endured increased competition as Unified Payment Interface (UPI) has seen everyone from Google to PhonePe enter the online payment market. “With the advent of UPI, there has been a rising narrative that questioned Paytm’s market leadership and which has somewhat lowered the appeal of mobile wallets in India,” TechCrunch writes. Yet despite the growing competition, Paytm’s expansive ecosystem (which includes a digital back, insurance tech, fullscale merchant acquiring, and credit tech) set it apart, creating a superior customer experience that’s unlikely to do its IPO plans any harm at all.

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