Paytm is within the stage of business where monetisation is that the key which is that the reason the corporate rolled back its cash back schemes, said Vijay Shekhar Sharma, its founder. the corporate which accurately used cashback as its user acquisition strategy, has found that it’s acquired more customers organically than through deals mainly on the idea of higher use cases and better service.
Sharma said that as a bank, Paytm can make money out of payment transactions. Taking a potshot at his competition which are mostly third party payment apps, Sharma said that as they drive more payments, Paytm gets to form extra money . To iterate his case, Sharma mentioned that while payment companies cannot charge merchants for UPI payments, NPCI which manages the payments rails makes money.
As a results of Covid19, Paytm is seeing higher adoption of digital payments among new customers and at an equivalent time repeated use of digital payments among existing consumers.
“If an individual was doing ‘X’ number of transactions per week, now he or she is doing atleast 3X,” he added.
While digital payments have grown within the country, Sharma acknowledged that there’s still an incredible amount of resistance from consumers. In his systems, a lively merchant could be still be doing only five to seven transactions through Paytm per month.
“Tier two, three consumers are still comfortable with cash which may be a reality,” he said.
Further talking about his broader plans in financial services, Sharma said that Paytm is chasing after low cost deposits which may later be used for lending. Citing the case of his acquisition of an insurance firm , Sharma said insurance is one vertical which may be a source of future money which money are often used for lending. But as a payments bank Paytm cannot lend and can partner with non banking lenders to end the ultimate leg.
“Lending is our ambition, we try to bring the deposits in through account deposits, mutual funds, gold et al. ,” he said.
Sharma added that there’s an incredible opportunity in lending in India, if the country wants to be a USD 5 trillion economy, then over subsequent three years there’s a trillion dollar worth of loans required and banks cannot fulfil that entire need. Any startup which may get a couple of billion dollars out of the pie to flow through them will stand to realize .
Flipping the tables, Sharma asked for Anandan’s discuss the country’s current funding environment, to which the ex-Google India baron acknowledged that there’s no dearth of capital globally, but what COVID-19 has done is formed Indian startups more efficient.
“You can see startups restructuring their cost, distributing better over the last four months, overall the standard of the ecosystem will improve,” said Anandan. “Just imagine Paytm which was valued at USD 18 billion within the last round becomes profitable next year, what proportion value creation would that be.”
Once the ecosystem improves in quality, there’s USD 20 trillion deployed at negative interest rates which may find its way into the startup ecosystem, he said