In the fast growing digital payments and mobile commerce platform in the country, PayTM has created a mark for itself under the leadership of Vijay Shekhar Sharma. He started the company in 2010 in Noida, which is adjacent to New Delhi and falls in the National Capital Region (NCR). It started with recharging and bill payment of various portals including electricity bills, gas bills, as well as telephone bills. Later on, it entered the e-commerce business in 2014, providing facilities and products similar to businesses such as Flipkart, Amazon.com, Snapdeal. In 2015, it added booking bus travel.

So, over the years, he has grown and expanded his  business by offering a host of goods and services or a full marketplace to consumers on its mobile apps. At present, the company has over 100 million registered users and mobile wallets.

Paytm is an acronym for Pay Through Mobile and is country’s most popular online destination for prepaid mobile and DTH recharges and shopping services. Moreover, its Android and iOS apps have been ranked among the most popular apps. Mobile wallets, like that of Paytm, have grown in popular in India, where credit card adoption is low and many services, including online retailers, process a lot of cash-based transactions. Mobile wallets provide greater reliability than cash without requiring users to get bank accounts.

Unlike all e-commerce companies in the country, Paytm doesn’t offer Cash on Delivery (COD) option. Over 90 percent of overall transactions are pure-play online transaction as consumers pay via wallet, credit or debit card, which is not only cost-effective but also keeps the payment process assured. The company had cracked a significant number of partnership for its wallet and rolled out zero commission marketplace model that let sellers not to pay commission (Paytm only charges payment processing fee) on sales. Other marketplaces like Flipkart, Snapdeal, Amazon and Shopclues work on a commission based model.

Paytm is the consumer brand of India’s leading mobile internet company One97 Communications. One97 investors include Ant Financial (AliPay), SAIF Partners, Sapphire Venture and Silicon Valley Bank. Alibaba Group-backed One97 Communications and is the holding company of Paytm’s businesses. For its mobile commerce business, which is an online marketplace, Paytm expects to touch a gross merchandising value (GMV) of Rs 1 lakh crore by 2020 from Rs 12,000 crore currently. GMV is a measure of the maximum price of goods and services sold on a company’s online platform.  According to industry estimates, Paytm records close to Rs 1,500 crore transactions annually in value terms. In comparison, Airtel Money records somewhere close to Rs 2,500 crore.

Paytm got a major boost in e-commerce when the doyen on Indian business, Ratan Tata made personal investment in the firm in March 2015. That was indeed a great feat for Sharma. In the same month, the company received a $575 million investment from Chinese e-commerce company Alibaba Group, after Ant Financial Services Group, an Alibaba Group affiliate, took 25% stake in One97 as part of a strategic agreement.

Building with acquisitions and partnership

At Paytm, O2O or Online to Offline is a key focus area. It had acquired Near.in, which is a platform that provides local services and connects professionals with customers looking to avail services such as dance teachers, yoga instructors, and many others. Currently, the company offers over 100 categories of local services. Vijay Shekhar Sharma along with Alok Goel from SAIF Partners are on the board of Little, which is a local discovery app based out of Bangalore. Little App has more than 500,000 users who get access to last minute deals on restaurants, movies, hotels, salons and others, spread across 11 cities.

In a first-of-its-kind partnership with ICICI Bank, Paytm has launched virtual prepaid cards which will give its users access to their Paytm Wallet both online and offline. This partnership also allows customers to top up their digital wallets at any ICICI Bank, using cash or cheques. It uses a 16 digit Paytm-ICICI co-branded prepaid card which can be used at all the retail joints accepting VISA, MasterCard, and Rupay. This is a one of its kind partnership between an Indian consumer internet company and the country’s leading banking group and the company is offering this new virtual card to customers through a new payment bank that will begin operations soon.

To increase the visibility of the company in the Indian audience, Paytm got the title sponsorship rights from Board of Control for Cricket in India (BCCI) for all international and domestic bilateral series hosted by the BCCI for a period of four years (a total of 84 matches) starting from August 2015 for Rs 203 crore or Rs 2.42 crore per match played in India. The rights include sponsor branding of series with the title sponsor logo, designation as the title sponsor of the series, visibility at the stadium, and broadcast sponsorship rights. This also includes all BCCI domestic (Ranji Trophy and Duleep Trophy etc.) matches in India. Earlier, the company had spent about Rs 50 crore during the 8th season of Indian Premier League. Paytm also served as an associate sponsor on Sony TV network (which has the telecast right of IPL) and was the official partner of the IPL team Mumbai Indians. Vijay Shekhar Sharma had equated Paytm with cricket by saying that the sport epitomises the Paytm values of passion, hard work, and team effort. We are very happy to partner with the BCCI and cheer for Indian cricket with millions of fans.

Expansion plans

In order to reach a larger audience, Paytm plans to foray into payments bank. It is counting on its mobile wallet experience to give it a clear advantage over established business houses that will be its main rivals. The company expects to touch Rs 10,000 crore in deposits in the next three years, building on existing consumer base and technological and cost-efficient setup. Paytm, the youngest licensee, Reliance Industries, Bharti Airtel, Vodafone, Aditya Birla Nuvo, India Post were among the 42 applicants that got approval for starting payments banks. These entities will take deposits from public, transfer remittances and make payments to recipients. Paytm Payment Bank Ltd, the new company formed to house the payments bank, will also house the mobile wallets business. The wallet license will be surrendered shortly to the RBI and will operate under the payments bank licence.

Sharma is now focused on the payments bank. He holds 51% in Paytm Payment Bank, One97 Communications owns 39% and 10% is held by a subsidiary of One97 and Sharma. After another round of expected fund infusion of about $400 million by Alibaba Group, which is slated to increase its stake in One97 to 40% from 25% now, the Chinese giant will own roughly 20% indirectly inPaytm Payment Bank.  One area that could set Paytm apart from its rivals is the experience and expertise gained from its mobile wallets business in checking fraud, which is the primary reason for the failure of such initiatives.

After the success in India, Sharma now wants to expand his business abroad. The company’s pilot expansion plans include Singapore and other South East Asian markets. Sharma has appointed crowd-funding website Milaap’s founder Sourabh Sharma to establish their presence in these geographies. The company says that they chose South East Asian markets like Indonesia, Thailand, and Malaysia, as they see great opportunity for payments on-the-go via the Paytm Mobile App in this region. Paytm intends to bring, to these markets, their app driven convenience of paying for utility bills in the first phase, and will cater primarily to areas such as bill payments, transportation, parking, metros etc. The company aims to reach up to two million customers in the first year of operations.

To keep pace with the expansion plans, Paytm plans to double its employee base in FY16 from around 3,000 currently. The company has added around 1,500 persons to its total headcount in FY15. The company has chosen management consultancy firms to hire senior leaders from the industry.  With a firm footing in the digital payments and mobile commerce platform, Vijay Shekhar Sharma is all set to reap the demographic dividend as more and more youngsters take to the online platform to shop, spend and transfer money. He is an ideal role model for many young e-commerce entrepreneurs.

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