TOPIC

Case Study On Paytm

 TABLE OF CONTENTS

ABSTRACT 3
CHAPTER 1 - INTRODUCTION 4
FUNDING 5
BUSINESS MODEL 6
PAYTM PAYMENTS BANK: A FEATHER IN PAYTM’S CAP 6
PAYTM DIGITAL GOLD: A FOOTSTEP TOWARDS GOLD BANK ACCOUNT 6
INITIATIVES 7
CHALLENGES AND OPPORTUNITIES 9
CONCLUSION 10
REFERENCES 11
ABSTRACT

A significant part of India’s populace was deeply affected by the ensuing cash shortage in a
world in which liquid cash constituted about 96percent of monetary transactions until this sudden
announcement. Mobile wallet services became profitable when taking advantage of the
fundamental opportunities in the centre of this problem. This case was built by Paytm, an e-
commerce website introduced by One97 Communications in 2010 as a basic Smartphone
recharge destination. Paytm, Pay-through-mobile, is the industry leader in the electronic wallet
business. In this case study we tried to cover Paytm’s strategies of marketing and positioning.
The success storey of Paytm has evolved as a quick and witty solution for a widespread
temporary cash crunch with banks imposed strict withdrawal rules and ATMs that run out of
cash. The "Ab ATM nahi Paytm Karo" initiative ensured that merchants and small traders, who
were allowed to embrace payments through their QR Code mobile payments solution, could be
targeted beyond customers.

Keywords - Digital payments; M-wallet; strategy for marketing; strategic positioning; analysis
of opportunity; comparative analysis; corporate strategy.
CHAPTER 1 - INTRODUCTION

Introduced as a recharge and billing platform in 2010 by One97 Communications Limited, Vijay
Shekhar Sharma's baby, Paytm (formerly PaytM) started off its journey in 2014 as an e-
commerce market. The Business has been investigating the possibility and impossibility of e-
commerce over the years and developed into a pocket, a shop, a destination to book hotels,
movie tickets, train, flight and bus tickets, as well as an easily payable destination, which offers a
continual caring for consumers, building confidence, promising satisfaction and guaranteeing
immediate refund towards any problem. This allows payment for nearly all conceivable regular
use, including weekly and monthly items, services (electricity bills, metro cards, gas and water),
entertainment, transport, smart phone charging, computer phones, electric cars, apparel and
several others.

The quick payout for 'Pay by Smartphone' is an Indian e-commerce and electronic payment
brand based out of a Delhi NCR established in the Indian 50 Powerful People (dated 14 April
2017) by Vijay Shekhar Sharma, an Indian ranking 18th in India Today. In 2017 he became
India's youngest man to be on the list, ranking 1567th in the World Billionaire’s list by Forbes.
Being the founder with a concept that was once audacious, a specialist in confronting the unseen
made internet his laboratory and began playing with the three fundamentals with internet:
(i) information, (ii) advertisement and (iii) commerce. His dedication towards eliminating plastic
money and intelligent use of innovative marketing strategies made Paytm reach where it is today.
Paytm today is almost a verb now, synonymous with Digital Payments, and is also one of the
defining pillars of the country’s growth story. Sharma’s brainchild was the biggest beneficiary of
Prime Minister Shri Narendra Modi's surprise demonetization in the year 2016 and with over 200
million users; Paytm so far has the deepest penetration in India. The founder believes and lives
by the mantra “Go Big or Go Home” which is also seen encrypted on the wall of the Noida Head
Office.

As a digital instrument for either transferring funds or purchasing anything in the store, Paytm
launched Paytm wallet in 2014, followed by charges and additional payment options. Paytm
launched an insurance cover in March 2017, at no extra cost, to secure the wallet balance of its
customers from fraudulent use. The business would now compensate all customers for every
amount incurred due to fraudulent transactions as a consequence of hacking, robbery, computer
malfunction or unauthorized access to the Paytm wallet of a person, up to a maximum of €20,000
or its wallet balancing, whichever is smaller and includes the coverage This insurance provided
Paytm's customers and traders with a great relief. In 2015, for four years, One97
Communications acquired the title sponsorship rights for the domestic and international cricket
matches at home at INR 203.28 crores.

FUNDING
Paytm is one of the first Chinese companies, Alibaba, to obtain financing. In March of 2015
Alibaba Group invested 575 million dollars in the firm and earned a personal stake in the
business from the renowned Indian industrialist Ratan Tata. As part of the political campaign, the
Ant Financial Services Party invested 25 percent in One97Communications. Ant Financial is
operating Alipay, the largest online payments network in China, while One97 is overseeing the
Paytm mobile payment framework in India. Alipay Wallet is reportedly reporting 190 million
users of Ant Financials Mobile Payment software, while Paytm is reporting to have more than 23
million users. During 2016, Paytm borrowed ICICI Bank’s nearly INR 300 crores in two
quantity, collecting $1.4 billion in 2017 from the Japanese SoftBank Group.
BUSINESS MODEL
The revenues of PayTM come from multiple ways: interest on the account of the Paytm Escrow,
publicities on its website of other products, annual subscription fees from different sellers, listing
their products on their own websites, commissions on paytm websites by sellers, Paytm Wallet,
etc.

PAYTM PAYMENTS BANK: A FEATHER IN PAYTM’S CAP

In 2015, Vijay Shekhar Sharma received 'principled' approval from Reserve Bank of India (RBI)
to create a Payments Bank which was approved in January, 2017. Rene Satti, CEO of the Paytm
Payments Bank, has announced it will launch its operations on 23 May 2017. Payment banks can
accept up to a 1 lakh deposit from each individual customer, according to RBI guidelines and
issue services, including ATM cards, net banking and non-risk financial products such as mutual
funds and insurance. However, payment institutions cannot manage cash cards or prepaid cards.

PAYTM DIGITAL GOLD: A FOOTSTEP TOWARDS GOLD BANK

ACCOUNT
In conjunction with the approved refinery MMTC-PAMP, Paytm launched Digital Gold to allow
users to purchase, sell and even store gold at no additional cost or transaction charge, excluding a
small fee which buyers pay as the production and delivery fee. Paytm permits users to acquire
gold for INR 1. Paytm is designed to create an account with Gold Bank that allows users to buy
gold and hold it digitally, but is also meant to use the gold to buy Paytm services – from charging
to paying electricity bills or from purchasing movie tickets from the Paytm Mall. Paytm is not an
alternative. The Digital Gold is therefore a step forward towards the key goal of building the
Gold Bank account.

INITIATIVES
The amount of Internet transactions in Paytm is approximately 4.00,000 a day which is the
country's second largest after IRCTC. However, with heaviness in the e-commerce industry, as
rivals play a last-man-standing game of massive financing, a niche player such as Paytm must
pursue marketing tactics to place itself as a customer intelligence brand, distinguish itself from
the large number of e-commerce players, and maintain itself inside the business.

A COMPARATIVE ANALYSIS: PAYTM Vs FREECHARGE Vs

MOBIKWIK

The Bank of India (RBI) announced the booming rise, with the demonetization of PPI payments
worth up to INR13 billion across 59 million transactions, for digital payment companies such as
Paytm, Mobiwik & FreeCharge. To pave its way to 29 marketing success, it was necessary for
Paytm to stand strong amid the pressing challenge imposed by the demonetization drive. With
competitors waiting for the right opportunity to take the leap, Paytm was quick enough to gain
the first-mover advantage in this regard. So what is it that Paytm managed to do what m-wallet
players like FreeCharge and Mobiwik couldn’t?

Paytm was heavily rewarded with immediate growth post demonetization owing to a 300 percent
rise in app downloads, a growth of about 6 times in the number of transactions per user per week
over a three week period and posted 1000 percent growth in money added to its m-wallet. Paytm
has registered 30 over 5 million users with a total user base of 150 million since demonetization
was announced on November 8, 2017. The government’s support for digital wallets has given
impetus to these m-wallet players to a large extent. Similarly, Mobiwik released in a statement
on November 22, 2016 reflecting a 40 percent growth in app downloads. Currently, Mobiwik has
over 35 million registered customers. Mobiwik’s target for its total value of transactions
increased by 10 times to $10 billion for 2017. So far as FreeCharge was concerned, the Snap deal
owned m-wallet giant revealed that they are getting a new merchant every 30 seconds and aims
to reach over 1 million merchants over a period of 12 months.
It can be found from the above data that all of these three major m-wallet competitors, i.e.,
Paytm, Freecharge and Mobiwik have seen a remarkable growth in their total value but somehow
Paytm has managed to be the leading player in the market not only because of its aggressive
advertising campaigns at the nick of time but also the attractive offers that came as part and
parcel of its promotional campaigns.
CHALLENGES AND OPPORTUNITIES

Transaction glitches, a trademark infringement filed by PayPal for use of similar color patterns
and an advertising faux pas were some of the critical areas that raised concern for Paytm. Its
trading volume increased by leaps and bounds. Under high pressure the technological backend of
Paytm seemed to crumble as it never anticipated the 1000 percent jump in the number of users.
There was an urgency to create a robust platform instead of shifting its entire focus on
advertising. This has given way to suspected insider fraud as there were two reported cases of
fraud against 22 private individuals amounting to about INR 10 lakh. Not only this, Paytm’s ad
campaigns complimenting the PM on his bold move dragged the company to a political war. The
quips, ‘Pay to Modi’, ‘Pay to Me’ aroused a great deal of controversy.
CONCLUSION

A mobile wallet's value proposition rests not only in the payments features, but also in the value
added services provided in telecom operators. Nobody wants to be trapped in a fast evolving and
increasingly challenging market in this consumer acquisition battle. All seems to have lucrative
deals and special packages. The concern is: is this approach justifiable or long term in the
context of consumer acquisition / retention? The spending in the mobile payment sector is
poured into millions of dollars. The mobile wallet market has a lot to offer on the outside, but
several public entities have been skewed by their appraisal. There are several businesses that
aggressively invest in mobile payment start-ups with a competitive benefit for them. Investors
often invest large quantities of capital on start-ups that are not yet successful. It's quick to bring
capital into things, but it's complicated to pull it back. By the end of 2017, Paytm expects two
billion transactions and a 500 million consumer base by the end of 2020.
REFERENCES

[1]. “One97 Communications Limited is the parent company of Paytm”. Retrieved from:
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[2]. “Vijay Shekhar Sharma is an Indian entrepreneur, founder & CEO of Paytm Mobile
Solutions Private Limited and Founder, Chairman, Managing Director & CEO of One97
Communications Limited”. Retrieved from: https://goo.gl/6Z6hEL last accessed on August 10,
2017.

[3]. retrieved from: https://paytm.com/ last accessed on August 28, 2017.

[4]. retrieved from: https://paytm.com/ last accessed on August 28, 2017.

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