Paytm achieves another milestone

The popular mobile payment and e-commerce platform Paytm has announced that it is now 200 million wallets strong. The company is the biggest success story of demonetisation announced by Prime minister Narendra Modi in November 2016. Within hours of the PM announcing the banning of Rs 500 and Rs 1,000 notes, Paytm user base jumped almost 150%. For weeks after that, the company's app ruled both Apple's App Store and Google's Play Store.

Paytm founder Vijay Shekhar Sharma tweeted the news of the company crossing the 200 million wallets milestone. Sharma also thanked Paytm users for the feat and said that he hopes that the company crosses 500 million-mark by the year 2020.

He also said in his tweet that the company is adding 7 lakh users per day and that the total balance in the wallets stood at Rs 899 crore.

The company also said in a press release that Paytm has become a preferred method of payment for use-cases ranging from mobile and DTH recharges to electricity and water bill payments as well as offline payments at grocery stores, pharmacies and parking among others.

"At Paytm, our goal is to help merchants and consumers transact digitally at zero extra cost. Reaching 200 Mn registered users and more than half a million users on a daily basis is a great showcase of the country's trust in our payment solution and reaffirms our belief in the need for a quick and easy cashless payment method. Going forward, we would continue to drive strong consumer-focused innovation in the category to reach the widest set of merchants and consumers in India," Deepak Abbot, senior vice president said.

Payments Bank of Paytm gets Rs 218cr infusion

Paytm Payments Bank has received Rs 218 crore in fresh capital as it prepares to start operations this month from Uttar Pradesh. Vijay Shekhar Sharma, founder and CEO of Paytm who holds the payments bank licence has infused Rs 111 crore, while One97 Communications and One97 India Communications, the parent of Paytm, put in the rest of the amount, as per latest regulatory filings sourced via business research platform Tofler.

Earlier in January , Sharma said he had managed to get the final nod from RBI to kick-start the bank. Paytm Payments Bank has issued 2,18,000,000 shares to the three shareholders.

The development comes on the back of two other payments banks -Airtel Payments Bank and India Post Payments Bank launching their operations.

TOI had reported its in December 9 edition, about Sharma selling 1% of his personal holding in Paytm's parent firm One97 Communications for about Rs 325 crore to invest in the payments bank. Sharma holds 51% stake in Paytm Payments Bank, as per RBI guidelines. Paytm had planned to start its payments bank last year but had to postpone the launch multiple times due to regulatory delays. After getting RBI nod, Sharma had said that about Rs 400 crore would be pumped into the payments bank.

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Paytm's story now a case study at Harvard

The journey of digital wallet Paytm from being a recharge platform to a payments bank is the topic of a case study published by India Research Centre (IRC) of Harvard Business School (HBS).

The study titled ‘Paytm: Building a Payments Network’ will be available for teaching purposes within and outside Harvard.

Established in 2006, Mumbai-based IRC supports its faculty with research in emerging trends in the region. IRC has supported most of the case studies and HBS research projects focused on business in South Asian region.

“Paytm is revolutionizing payments in India and it is a shining example of India’s digital future,” said Professor Sunil Gupta, one of the authors of the study and Edward W. Carter Professor of Business Administration and Chair of the General Management Program at HBS.

Professor Gupta and Professor Das Narayandas had also published a study on Flipkart’s decision to hive off its logistics unit Ekart as a separate company and the e-tailer’s move to a marketplace model in April 2016.

“We are on a mission to bring half a billion Indians to the mainstream economy and in turn build a business that India would be proud of. For us, the journey to enable fellow countrymen with digital payments and become a part of financial inclusion has only started right now. It is truly a privilege to have it become a part of the curriculum offered by the prestigious institute,” said Vijay Shekhar Sharma, CEO of Paytm.

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m-wallet to grow by CAGR 211% between 2016-22 due to demonetisation

Mobile wallet transaction is expected to carry out majority of transactions in the next 10 years with its market value to set to grow by CAGR of 211% between 2016 to 2022, an ASSOCHAM-RNCOS study revealed.

Reduced prices of internet due extensive competition, cheap smartphones, advancement of new technologies such as 4G and demonetisation will result in the market value of m-wallets reach Rs 275 trillion by 2022, the study suggested.

The report mentioned that the average wallet spend for retail which was about Rs 500-700 prior to demonetisation is expected to increase to Rs 2,000-10,000. The share of mobile wallet in the total mobile payment volume transactions is expected to rise from 20% in 2016 to 57% by 2022.

In 2016, the report says, total m-wallet transaction was 0.6 billion, which is expected to reach 260 billion by 2022, growing at a CAGR of 163%. Cash in the e-wallets that people keep have grown by 1000% and average number of transactions too has gone up from 3 to 18 since demonetisation.

"All small and large merchants, street dwellers have started accepting mobile wallet payments post demonetisation move," the report said.

Indian m-wallet market in 2016 was around Rs 1.54 billion which is expected to grow at a CAGR of 196% during 2017 to 2022 and reach Rs 1512 billion by the end of 2022, the study suggested.

The findings of the study show that the total transaction volume of the m-payment in India was 2.9 billion and is expected to grow at a CAGR of 132% between 2016 to 2022 to reach around 460 billion by the end of 2022.

Overall mobile payment may grow at a CAGR of 150% between 2016 to 2022 to reach Rs 2205 trillion.

The report also said that after banks and telecom companies, software service companies will venture into the m-wallet market. The extremely competitive and highly fragmented m-wallet market in India will see more tie-ups happening between m-wallet companies and several entities like restaurants, grocery stores, and ticket booking websites.

Mobile wallets will soon offer instant loan facility for short term to its customers, the report added. The study, however, suggested that RBI should relax its current policies and allow cash withdrawals from the semi-closed wallets while easing the rules of bank licensing to promote m-wallets.

The study also pointed out that while the young users prefer internet and mobile banking over traditional transactions, consumer’s mindset is the biggest factor that hinders the growth of Indian m-wallet market as they are more skeptical about the safety and security issues as in the case of internet banking.

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PayPal opposes registration of Paytm’s new trademark

Global payments major PayPal has filed a complaint opposing the registration of Paytm's trademark in a notice with the local trademark office, which falls under the ministry of commerce.

The notice, reviewed by TOI , says that PayPal has pointed out that Paytm's trademark is "deceptively and confusingly similar to PayPal" with a similar colour scheme.

"The first syllable in each mark is in dark blue colour and second syllable is in light blue colour. Further, both marks begin with PAY' which consumers tend to remember more than the second syllable, and the marks are of similar length. These similarities cause likelihood of confusion in the aggregate, specially considering the fame of the opponent's (PayPal) earlier trademark," the notice said.

When contacted, both PayPal and Paytm spokespersons refused to comment on the matter.

Paytm founder Vijay Shekhar Sharma raises Rs 325cr by selling 1% stake

Digital payments and commerce platform Paytm's founder and CEO Vijay Shekhar Sharma has sold 1% of his holding in One97 Communications to raise about Rs 325 crore.

This money will be pumped into the group's proposed payments bank. Sharma has sold the stake to one of the shareholders of One97 Communications, the company that runs Paytm. The shareholder's name was not disclosed.

"We completed the transaction last week," Sharma told TOI. According to documents filed with RoC (Registrar of Companies), Sharma had a 21.33% stake in One97 Communications as of March 2016. The latest transaction reduces that stake to 20.33%. The transaction values One97 Communications at about $4.7 billion.

Paytm founder Vijay Shekhar Sharma raises Rs 325cr by selling 1% stakePaytm founder Vijay Shekhar Sharma raises Rs 325cr by selling 1% stake - ImageSharma has received in-principle approval from the Reserve Bank of India to start the payments bank but the final approval is awaited.