1/10th of the World will use Paytm by 2018

No joke, the com­pany tar­gets to bring 500 + mil­lion In­di­ans into dig­i­tal main­stream by 2018; that’s roughly 1/10th of the world pop­u­la­tion

DQ Channels - - Front Page - ANKIT PARASHAR/(ankitp@cy­ber­me­dia.co.in)

Ram­prasad sells bha­jias (bread pako­das, samosas etc.) in a small cart in HUDA Sec­tor 31 mar­ket in Gur­gaon. On an av­er­age, he makes about 1.5-2k ev­ery day. That was till Novem­ber 8, un­for­tu­nately. The day de­mon­e­ti­za­tion was an­nounced his clien­tele dropped by 90%. With his fam­ily of four daugh­ters, wife, par­ents and a non-work­ing brother-in-law to sup­port in a re­mote Haryana vil­lage, there was ab­so­lutely no way he could make his ends meet. Till his vil­lage sarpanch and other el­der­lies told him to ‘paytm karo’ (thanks to lo­cal ver­nac­u­lar ads in re­gional news­pa­pers).

Or take the case of Bab­u­lal who sells veg­eta­bles near Noida Atta mar­ket. Be­fore de­mon­e­ti­za­tion, his daily earn­ing was in the range of 4-5k which came down dras­ti­cally to less than 1k. And he can­not blame his clien­tele ei­ther. With no cash in sup­ply (or very lit­tle if you stand in a war-zone queue), there was lit­tle chance of peo­ple spend­ing short changes in cash to buy veg­eta­bles. His sav­ior also turned out to be ‘paytm karo’

Moving up the so­cial hi­er­ar­chy, now let’s hear from Gup­taji, the owner of Sam­purna Gen­eral Stores in posh South Ex, Part 1 in South Delhi. He has been earn­ing 60-70k daily (that’s the of­fi­cial count, not ques­tion­ing the money his wife buys her gold jew­ellery and his daugh­ter her Clavin Kleins, Vic­to­ria’s Se­crets and iPhone 7s). Dras­ti­cally, that too came down to a tenth; the big­ger irony was that though Gup­taji owned a PoS ma­chine, he was loathe to use it. His of­fi­cial ex­cuse: “net­work theek se chalta nahi” (unofficial, ob­vi­ously re­mem­ber those Calvin Kleins). Well ‘paytm karo’ (on the ad­vice of his daugh­ter Honey) has for the time be­ing def­i­nitely stopped the gold and Calvins, but it has at least re­stored san­ity in the Gupta house­hold for the time be­ing.

The last story is of Saira Bano, a res­i­dent of Nuh who works as a maid in the plush apart­ments of Gur­gaon Sohna Road. Now, how much the ‘plush’ res­i­dents of these plush apart­ments might be flush with cash, af­ter Novem­ber 8, they were all in the same boat as Saira. Re­sult: no one is will­ing to pay her salary in cash. With five kids to feed at home, what would Saira have done? Thanks, again to some lo­cal ver­nac­u­lar ra­dio ad, ‘paytm karo’ has come to her res­cue.

All sto­ries have a com­mon thread and I am sure bound to pose a com­mon ques­tion. Well ‘paytm karo’ helped Ram­prasad, Bab­u­lal, Saira Bano and Gup­taji, but how? Af­ter all, while peo­ple have started un­der­stand­ing how to use Paytm to buy, these are all sell­ers who are re­ceiv­ing money from buy­ers in lieu of prod­ucts or ser­vices de­li­v­ere.

The an­swer is the Paytm app launched for Pointof-Sale (POS) ca­pa­bil­i­ties. This re­formed app al­lows all small and medium mer­chants to ac­cept all card pay­ments in­clud­ing Rupay, Visa, Master­Card and Mae­stro. Un­der ‘Ac­cept Pay­ment’ icon on the new up­dated app, small shop­keep­ers and busi­nesses can self de­clare their de­tails and give bank ac­count de­tails to start re­ceiv­ing pay­ments in­stantly.

So Ram­prasad, Bab­u­lal and Saira (as well as Gup­taji) self de­clared them as mer­chants and with­out even PoS ma­chines have been able to win back their cus­tomers as well as add new clien­tele. And thanks to the Jan Dhan Yo­jna, the first three al­ready had opened bank ac­counts ear­lier. This was not just a boon, but vir­tual life-saver for them, con­sid­er­ing they never heard what a POS is (whether it is eaten or ap­plied on hair).

A mer­chant has a limit of Rs 50,000 per month on trans­ac­tions (enough for Ram­prasad, Bab­u­lal and Saira) af­ter a self dec­la­ra­tion as a mer­chant as per RBI’s lat­est guide­lines. How­ever, ac­cord­ing to Paytm, a mer­chant can in­crease the trans­ac­tion limit af­ter getting ac­cep­tance by Paytm as a big mer­chant, by do­ing due dili­gence with his eKYC norms. Which ob­vi­ously Gup­taji has al­ready done and reg­is­tered him­self as a full-fledged marchant.

And the even sweeter news is Ram­prasad, Bab­u­lal and Saira don’t even need to pay any charges or fees (ap­pli­ca­ble for all mer­chants with be­low 50,000 monthly trans­ac­tion) till De­cem­ber 31. And with the Paytm pay­ment bank­ing (which al­ready has the nec­es­sary RBI lic­nses) likely to be launched in Jan­uary, this ‘free­dom’ can ex­tend for life if they be­come Paytm bank cus­tomers. Ob­vi­ously Gup­taji is be­ing charged at the nor­mal 2% bank­ing rate.

With a move that has helped nu­mer­ous such Gup­ta­jis (as well as the Ram­prasads, Bab­u­lals and Sairas) from the un­cer­tain­ties brought about by de­mon­e­ti­za­tion no won­der Vijay Shekhar Sharma, founder and CEO of Paytm is beam­ing his ’32 all out’. In his words, “We are happy to an­nounce this new up­dated fea­ture to our app which em­pow­ers our coun­try and also ev­ery mer­chant to ac­cept all card pay­ments from their cus­tomer. We are con­tribut­ing our na­tion to dig­i­tize our econ­omy.”

That he is do­ing no doubt (even if skep­tics say that he is mak­ing money). With num­bers like 40,000 mer­chants sign­ing in a day since de­mon­e­ti­za­tion and in­creas­ing to 70,000 af­ter this app launch, the num­bers tell their own story. Paytm claims POS app will help rise to one POS for ev­ery 120 In­di­ans whereas India has only 1.4 mil­lion POS ma­chines till now and there is only one POS for ev­ery 1785 peo­ple in the coun­try.

Talk­ing about his business model, Sharma in­forms that Paytm is tar­get­ing tea stalls, milk booth, park­ing lots, auto rik­shaws, gro­cery stores, petrol pumps, chemists and even street food small ven­dors with its built-in new fea­ture. That’s ex­actly the strata where Ram­prasad, Bab­u­lal, Saira and Gup­taji be­long to.

For now, es­pe­cially to reach out to these dig­i­tal ‘have nots’ Paytm is fo­cus­ing very strongly on their mar­ket­ing. Though the high­est trac­tion is in Hy­der­abad fol­lowed by Chen­nai, it is tar­get­ing Tier II and Tier III cities more now. Though this fea­ture is fo­cused and has been built for small shop­keep­ers and small busi­nesses, the com­pany is pro­mot­ing it dras­ti­cally in all re­gional news­pa­pers in ver­nac­u­lar lan­guages and also a strong and ef­fec­tive com­mu­ni­ca­tion plat­form like on­line and so­cial me­dia. No won­der Ram­prasad and Saira and even Gup­taji (thanks to Honey) has come into these Paytm net thanks to these ads.

Looks like ev­ery penny of the `500 crore mar­ket­ing bud­get since de­mon­e­ti­za­tion has been well spent by Paytm (though the us­age of PM modi’s pic­ture in the ad was in bad taste, but then you for­give small trans­gres­sions). Af­ter all, it was not just to ac­quire mer­chants, Paytm over­all in India today has 15.8 crore cus­tomers (mostly buy­ers, but now in­creas­ingly sell­ers too). The mar­ket­ing spend of `2,546 crore in the last fis­cal too seems to be well spent from that per­spec­tive. With rev­enues in the range of `1,000 crore, some fi­nan­cial an­a­lysts would ob­ject to the huge losses. In ad­di­tion, when users trans­fer the Paytm money from their re­spec­tive bank ac­counts, Paytm has to pay at least 2% to the bank. With the cir­cu­la­tion of Paytm money within the Paytm world, the com­pany gets noth­ing--nei­ther do they pay nor do they earn. But talk­ing about mar­gins, when a user buys tick­ets, shop and pur­chase by us­ing Paytm money, the com­pany gets up to 15% on that par­tic­u­lar trans­ac­tion. But Sharma is not even both­ered with these nit­tygrit­ties. Rather he laughs them off say­ing he is not even think­ing of break­ing even be­fore five years And he has some re­ally am­bi­tious tar­gets to meet his goal. Cur­rently, there are 55 crore In­dian bank hold­ers own­ing a card (debit/credit) which trans­lates into 74 crore cards (each per­son has mul­ti­ple cards). With Paytm user base at 15.8 crore only, this is ob­vi­ously the first low hang­ing fruit to pluck out. Then with a 40% in­crease in daily av­er­age trans­ac­tions in the past 2 months, Sharma and his team are ob­vi­ously play­ing for much higher stakes. Ac­cord­ing to Paytm, peo­ple in met­ros have in­creased their daily trans­ac­tions to an av­er­age of 3 per day, in the last fort­night. With daily user growth at 500%, the com­pany is con­fi­dent that it will do 2 bil­lion trans­ac­tions by the end of this year. “As dig­i­tal­iza­tion is our only fo­cus, we plan to bring 0.5 bil­lion In­di­ans into the dig­i­tal main­stream by 2018. Ear­lier the tar­get was by 2020, but we have now brought it down by 2 years”, ex­ults Vijay Shekhar. In­ci­den­tally, this num­ber trans­lates into one-tenth of the world pop­u­la­tion. Looks there are nu­mer­ous Ram­prasads, Bab­u­lals, Sairas and Gup­ta­jis who will soon be do­ing Paytm karo. And while the in­tended im­pact of Modi’s de­mon­e­ti­za­tion is highly de­bat­able, at least one as­pect of dig­i­tal India might be­come real even be­fore Modi ends his term. Then in­stead of Modi be­com­ing Paytm brand am­bas­sador, the govern­ment should make Vijay Shekhar Sharma the ‘Dig­i­tal India’ brand am­bas­sador.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.