Case Study

Paytm, Journey from Mobile

Recharge to e-commerce market
History
 Founded in 2010, Paytm started as a prepaid
mobile recharge website.
 Currently its business is not only limited to
recharge but has expanded as online
payment platform including mobile
recharges, utility bill payment, wallet payment
and wallet to wallet and wallet to bank
transfers for many leading internet based
companies like Bookmyshow, Makemytrip,
FoodPanda, IRCTC and many others.
 It was founded under the implemented
idea of Vijay Shekhar Sharma and has got
the first mover advantage in the mobile
industry.
 The name Paytm is supposedly an
acronym for Pay Through Mobile.
 The company has been backed up by
Alibaba group and Ratan Tata. The firm
raised $575 million from Alibaba group
for a share of 25% in the company.
Recognitions
 In 2012, Paytm was recognized as the
‘Most Innovative Startup of the Year’ at
the Entrepreneur India event organized by
Franchise India. In 2013, the company
received several awards, such as
Knowledge Faber Best Mobile Wallet
Program Award, a special mention in m
Billionth Awards in
mCommerce/mBusiness category, and
MMA Smarties Award for mCommerce.
What's 'Virtual' about this
wallet?
 The basic concept is really simple - a
virtual wallet just serves as a place to
hold some of your money online.You
make payments using the money stored in
your wallet instead of using a credit card,
debit card or net banking, which means
your bank account doesn't need to be
accessed. Of course, adding money to the
wallet still requires you to use one of
those methods.
Why would you want to do this?
 The biggest reason is probably ease of use
- something that is particularly true for
mobile users. Unless the site you want to
make a payment on lets you save your
credit or debit card details, you're going
to have to spend a fair bit of time typing
them in every time you need to make a
payment.
How paytm makes money through
mobile recharge?
 The primary revenue source is commissions
from Telcos which ranges from 2%(for large
& Established operators) to as high as 5%
(for new & small operators). This again
depends on whether you are directly
connected to the Telco's recharge platform
or are using an Aggregator (like Oxigen,
Euronet, Cyberplat). The margins would be
lower in case of the latter.
 Since the large operators contribute to
the bulk of the txn volume, the average
commission earned per txn would
typically be in the 2.5-3% range.
 The average payment gateway charges are
typically in the 1.8-2% range (will be
lower now after the recent 1% cap on
debit card MDR by RBI).
 The net revenue per txn would therefore
be around 0.5-1%. And that's the revenue
(not profit) a recharge site makes.
Reasons for exponential
growth:

- Huge untapped market

- Convenience
- Lure of free coupons
- Google ads
Number of searches comparison
New features
 Paytm Wallet

 Zero commission based mobile

marketplace

 Online Bargain

 Slide and share

Our new Paytm Wallet features
are here: transfer money online
or deposit cash

 The Paytm Wallet makes your life

easier! You can load your Paytm Wallet by
depositing cash in all Axis and Yes bank
branches and by online transferring your
money through your bank account
at many banks across India.
How it works offline:
 All you’ve to do is to fill in the“Pay-in-
Slip” (available at all branches) with your
mobile phone number that is registered
with Paytm as reference number, then
submit the deposit slip at the cash
counter, and money will be credited into
your Paytm Wallet. Important –
always mention clearly PAYTM
EASYPAY and your registered mobile
number on the slip!
How it works online:
 The process is simply done through a
normal NEFT/RTGS transaction.
Access your net banking account, select
‘Bank transfer’ and use your Paytm Wallet
as payee. For this, you need to submit a
virtual account number (PAYTM + User
Mobile Number) and IFSC code with
amount and your Paytm wallet account
would be credited instantly
A zero commission
marketplace
 Paytm launched the mobile based
markeplace in February 2014 and has now
come up with the Seller App with a zero
commission model.
 What this means is that sellers on the
platform don’t need to give a commission to
Paytm on sales. Merchants keep all of what
they sell.
 Other marketplaces like Flipkart and
Snapdeal work on a commission based
model.
 According to this Firstpost report, Paytm
claims to earn revenues of over $500
million now but it is expected that this
will jump to $2 billion by December 2015.
Half of Paytm’s run rate will then come
from the m-commerce marketplace push.
And the focus will be on getting more
users.
Online Bargain
 Paytm launched Shopping app with a
revolutionary concept to bargain for a
deal before you buy.
 With an eye to change the game in
mobile commerce in India, the app
features shopping in various categories
including Men, Women, Kids fashion and
Home furnishing along with Mobile &
DTH recharge options, which were
already available on Paytm.
Slide and Share
 A faster way to pay with Slide To Pay
& Request Money
Transferring money is one slide away! Say
hello to slide to pay – transfer money to
your friends wallet by simply sliding right.
Upon sliding right, the payment will be
initiated, all of your money transfers are
ready to go at your fingertips.
 Saved cards – new on your Paytm Wallet
App for Android. The new feature simply lets
you view your credit or debit card simply
whenever you make a purchase or payment
which saves the payment details to your
account for future use.
 You’ll also notice, that every transaction
becomes now a conversation, where you can
directly chat with your friends! You can send
reminder messages to anyone and easily type
replies to your friends whenever you would
like to transfer money or receive money.