He also said that despite Paytm discontinuing cashbacks, users now come to the app not for cashbacks, but because of the number of use cases it offers.

Vijay Shekhar Sharma at Techsparks 2018Image Credit: Picxy.com/munna
Atom Digital Payments Saturday, July 25, 2020 - 17:21

Online payments company Paytm will soon be venturing into stock broking, the company’s co-founder and CEO Vijay Shekhar Sharma said on Thursday during the Global Fintech Fest.

During a session titled ‘Reimagining Financial Services for Billion Users’ with Sequoia India’s Managing Director Rajan Anandan, Sharma said that the company had started its lending journey first with deposits in wealth and gold, then brought in fixed deposits with a partner bank.

“Payments have been the largest revenue for us. Thereafter, we started our e-commerce business and financial services stack such as insurance and we hope to do lending. Then we have our mutual fund business and we will launch stock brokerage in a few weeks,” Sharma said.

He also said that the company is witnessing up to 3.5X growth in transactions.

"If a customer was doing X transactions before, right now he's doing 2.5-3.5X transactions. Customers who are used to digital are getting engaged deeper and newer customers are coming on the platform...the number of customers who are on the platform and are doing more number of transactions has phenomenally increased," he added.

Cashbacks

Paytm was one of the first players to actively offer cashbacks in the initial years before it was discontinued. When asked if it was an acquisition strategy, Sharma said that it was about service where in the initial years they were building their product, and later monetising.

“I'm very comfortable saying that we actually make three times more money than last year, and we spend one third the money than we did in the same month last year, and we are happy seeing the customer growth,” he said.

He said that users now come to the app not for cashbacks, but because of the number of use cases it offers. He added that they made several changes to the Paytm app over the years, and increased use cases, which has paid off.

While it is widely assumed that payments doesn’t have money, Sharma said that it is a misnomer, and that the payment value chain has money. He said that Paytm Payments Bank is making money.

“Who's taking that money is a separate question. For example, UPI doesn't have money for an app provider, but NPCI (National Payments Council of India) still makes money from UPI. The switching costs exist in the system. And remember, we are a bank, we are not a payments service provider on top of some of the banks. So the bank has float revenues, transaction revenues, switching revenues, everything. It is the bank that gets revenue, not the service provider that gets revenue,” he added. 

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