Thursday, November 17, 2016

Paytm – Cashless Currency and More

Phrase “Paytm karo’ gained prominence today with the milieu of demonetisation of higher denomination currencies in India. One 97 Communications launched an online recharge portal by the name Paytm initially and upgraded it to an e – wallet in the year 2014. 

Paytm was a disruption in the online payments space as the world is moving towards digital payments. The biggest challenge for an online e - wallet earlier is the consumer behaviour. The transaction of Indian consumers are predominantly cash driven. They trust physical transactions (particularly involving cash) over virtual transactions. Another area of concern is the idea of wallet. Wallet usually is in personal custody and physical. But an e- wallet is in whose custody? (Read consumer confusion). I presume when Paytm was launched, the market was not mature enough for a swift change.

Luckily, for Paytm they were able to capture trust among the techno savvy consumers through their online recharge portal which got stretched to other products. The mobile wallet offered money transfers, bill payments, and gifting options by understanding the hassle consumers face today (due to busy lifestyle). The positioning was based on utility. You don’t want to carry cash or walk to an ATM regularly but do all with Paytm. 

The primary segments were tech savvy young people with a smartphone. But later they counted in people in all demography as well as geography as segments. Thus they urged a taxi driver to accept hire charges through Paytm. To make the process simpler they introduced QR codes. Hence, one can pay his auto rickshaw fare or grocery bill by scanning the QR code with your smartphone which takes lesser time. The QR code, which customers can scan on their mobile and pay their bills, can be seen behind the rickshaw driver’s seat, at a grocery shop etc.  Paytm rapidly added digital goods such as movie tickets, tickets for flights, trains and events, and gift cards.

Another segment they added is the off – line retailers by giving them a market place through O2O (offline-to-online) commerce. In this model the payment portion of the whole retail transaction is made online through Paytm. So consumer can choose the product offline and pay through Paytm. Later the company added schools into their basket.

Paytm is not devoid of competition. E – wallets such as freecharge, Mobikwik, Oxigen along with mobile service providers like Airtel, Vodofaone etc. and banks are now posing a stiff challenge for Paytm. Nevertheless, the journey still continues for Paytm. The new developments in the country instilled a forced change in consumer behaviour which makes the future promising.

For me , Paytm is a perfect marriage of technology and service.

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