New Delhi: In June 2013, this reporter was at Paytm’s Noida office to interview chief executive officer (CEO) Harinder Takhar (now CEO of Paytm Labs) when the digital payments company hit 1 million downloads on its Android app. Takhar was far from effusive. His reaction, amid high-fives around the office that Paytm shares with parent company One97 Communications, was to turn his 27-inch computer screen around to face us and smile contentedly.
Then three years old, Paytm had reached six million users, most of whom used the service to recharge their mobile phones and pay for direct-to-home television subscription.
Around this time, Paytm was also just dipping its toes into e-commerce, offering deep discounts to rechargers who opted to see the deals.
ALSO READ | How to handle e-wallet grievances
Takhar was quick to remark that users who did not want to see the deals on the website or mobile app could quickly recharge their phones without ever being prompted to see a deal or a product on sale.
In 2013, Paytm got a special mention in the mBillionth Awards given by the Digital Empowerment Foundation to organizations that are building sustainable businesses based on mobile technology and which have a huge transformative potential. Last year, the number of mobile phones in use in India crossed 1 billion.
Cut to April 2016. Paytm’s mobile wallet is arguably the most successful in its category in India. It is on track to achieve its goal of 500 million wallets in four-five years, an aim it had stated in its nomination for the mBillionth award.
In terms of key milestones, in February 2015, China-based e-commerce giant Alibaba Group committed $575 million to Paytm through its affiliate Alipay Singapore E-commerce Pvt. Ltd. In August 2015, Paytm received a payments bank licence from the Reserve Bank of India.
The recent move by the government to demonetize Rs500 and Rs1,000 notes has shifted attention to efforts towards a cashless economy. And mobile wallets (essentially apps that you can add your money to and make payments in stores, etc.) have become more important than ever before.
In this backdrop, the company has announced that it would transfer its wallet business to the newly incorporated Paytm Payments Bank Ltd after receiving necessary approvals. Paytm has set a target of 200 million accounts, which will include current and savings accounts as well as mobile wallets within 12 months of launch. It also aims to reach a base of half a billion accounts by the year 2020.
Paytm already has close to 150 million e-wallet users, which includes users on the web and smartphone apps.
Paytm has been growing its e-commerce business aggressively over the past two years to sell apparel, footwear, household items, electronics, and now movie tickets.
The company will also make it possible for Indians to shop from the US and China soon. Earlier this year, Mintreported, Paytm and Alibaba’s cloud computing arm, Aliyun, entered into a deal that will allow Paytm to enter markets such as the US and China.
With a renewed push in India towards a cashless economy, mobile wallet platforms such as Paytm, which offer a plethora of services, could well be in a prime position to take advantage of the move.