Paytm Case Study – 0 to 1 Revolutionary Business Model in India

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Paytm Case Study – 0 to 1 Revolutionary Business Model in India

Have you ever been eager to go through the Paytm case study, or come to know what is the Paytm business model, or else how Paytm makes money, if not, then you must not miss this article.

This article is going to be a booster for inspiration for you if you are thinking of setting up any business, your business could buy anything, it doesn’t matter, but by reading this article, you will have an idea of how to revolutionize your business with ultimate speed.

Paytm is growing with ultimate speed day by day, month by month, and year by year exponentially.

In this article, you will come to know how Paytm was established, how it faced issues and overcame them, and what is the Paytm revenue model.

What is Paytm and Who is The of Founder of Paytm

Paytm is the first, oldest, biggest, and reputed online money transaction application in India, which was founded by Vijay Shekhar Sharma in 2010 in Noida with an investment of $2 Million.

Fintech company example for Paytm case study

Paytm Business Model is the first Fintech Company of India, Fintech company stands for Finance and Technology which generates the fintech concept.

Vijay Shekhar Sharma, who is a futuristic person, had predicted the problems which were going to come across the people for the money transaction, and from that day he started to work on the strategy to solve the hurdles before they were born.

He noticed that banks were moving to online technology, but were failed to adapt the online alternate payment platforms, they failed to erase the long queues of people outside the bank who were waiting for their turn.

People were getting irritated, frustrated due to multiple visits to banks, unnecessary charges, and any other reasons, and as a solution to these factors, a fintech company was born, which was named Paytm Company.

As a result of his effort, we are using Paytm now for easy payment transactions, which avoids the problem of waiting, changes, and delays in money transfer to our relatives and friends.

Paytm Highlights

  • 16 Million Transaction Per Day
  • 30 Crores Active Mobile Users
  • First Time Mobile Wallet Concept Launched in India
  • Mobile Payment Transactions
  • Revenue of 3,281 crores INR (US$460 million, 2020)
  • 16 Billion Valuation of Company

How The Paytm Was Founded

When the Business Model of Paytm was introduced, the world, and of course India too, was moving from offline technology to online technology. Amazon was coming to India which was delivering the items online to the customer’s doorsteps.

Customers were paying the amount to their merchants by different methods, such as cheque payment, cash payment, NEFT payment, but there was no option to pay directly via mobile.

Vijay Shekhar Sharma works to establish a way by which a person can pay money to anyone directly by using only mobile via internet connection.

He introduced Paytm Wallet (Pay Through Mobile), and the biggest benefit of the Paytm wallet is that it ruined the biggest problem of change transactions, and this was the foundation of Paytm Business Model.

Market Share of Paytm

The Business Model of Paytm is leading on the top edge on the first number with 68% of market shares, and the rivals of Paytm are too far away from it.

  • Paytm – 68%
  • Freecharge – 11%
  • Airtel – 5%

There are multiple fintech companies like Jio Money, Mobikwik, Google Pay, PhonePe, BharatPe, which are too far from Paytm Business Model.

Till now, paytm has not stopped, it is increasing these numbers by expanding the team, business model, business revenue and implementing the constant improvement strategy.

Revenue Model of Paytm – How Paytm Makes Money

As everyone knows that Paytm Company does not charge its customers, so the point of thinking is that how Paytm makes profit, right?

Well, Paytm Makes Money from a very simple strategy, Paytm Company holds the multiple pipelines from where Paytm makes profit including Paytm Business from sellers, Advertising, Annual Subscription, Pay Per Click.

Paytm earns its profit from the money which is lying on your Paytm wallet by making its FD and earning interest which is counted in the profit of Paytm.

One answer to your question about how Paytm makes profit is that it does not charge for money transactions from personal account to personal account.

But it charges 1.5% for Business accounts including GST which is legal.

Hence, Paytm Company does not charge a single rupee from its customer for availing its service for money transactions, it generates revenue from cross-selling and upselling in terms of Ecommerce store providing facility.

Paytm Revenue Model is quite interesting because Paytm might be one of those very few companies which generates the massive profit by providing the free services, discount and cash back to the customers.

Why Paytm is Leading on Top – 1800 Rotation Idea Worked

Paytm Company connected the Under-served society and Un-served society to it, you can notice that every kind of person, business, and individual is having the Paytm.

Paytm did not keep the approach to leave any class of people unserved, it has been reached to everyone by implementing the technology.

The turning point of Paytm is the visit of Vijay Shekhar Sharma to China where he got a millionaire idea and he implemented it by rotating in 1800, and business revolutionised overnight.

Once he went to the mall in China to shop and stood in a queue for the payment. The queue was too long but was getting shortened quickly.

When it was his turn, he noticed that the merchant had a scanner with hardware and infrastructure, and people had a QR code on their mobile.

The merchant was scanning the QR code from the customer’s mobile, and payment was transferred from the customer’s account to the merchant’s account, and receipt of payment was sent to the customer’s mobile number.

Vijay Sharma was impressed by this methodology and made up his mind to apply this technology in India with his merchant customers.

But it was too difficult to arrange numerous scanner systems for every merchant of India, and it was costly as well that was not affordable by each merchant.

Then he clicked one brilliant business idea and rotated the whole concept to 180 degrees. He reversed the process, he replaced the equipment from customer to merchant with each other.

He got an idea that almost every person in India is having a smartphone with a camera, so he can scan the QR code anywhere, why should he not give the QR code to the merchant i.e. recipient?

This idea changed the whole game, he placed the QR code with every merchant, and the customer is having a smartphone with the camera already by which he can scan QR codes anywhere.

Pickpoint of Business Growth For Paytm

Run if you want to succeed, if you can’t run, walk, if you can’t walk, roll, but don’t stop, and exactly on this concept, Paytm worked forever, and as long as the opportunity came, it grabbed.

This greater opportunity was the duration of Demonetization in India in 2016, when the cash availability was tending to down, and people did not have another option was online money transaction.

This was the golden opportunity for VSS and he grabbed it, and reported the 1000% of business growth in that Financial Year.

Many sources tell that VSS is a lucky person that he got an unbelievable growth during the demonetization, but the fact is that he is not lucky, he is a futuristic though pattern holding person.

He also faced technical glitches, and he also passed through many frauds, but he sustained agility with stability.

Another mistake Paytm made during the advertising campaign by running ads with words ” Drama mat karo, Paytm Karo”.

People got hurted by this slogan, people identified themselves with these lines and took it personally, but Paytm took a quick action to improve this glitch and changed it to ” Chinta Mat Karo, Paytm Karo ”.

Hurdles For Paytm and Solution

The Road of Success is not smooth and straight, many ups and downs come and you must deal with them, and Paytm also is not excluded from it.

During the demonetization period, Paytm expanded with exponential growth. The growth of 1000% during the minute duration of demonetization could not be absorbed by Paytm.

Suddenly the customer base got hiked, and the customer care service was also unable to handle it, it was stuck, and people started to curse Paytm for lack in regards to service providing.

People trolled the Paytm services on Twitter by stating that Paytm is bad, Paytm is going to be closed etc…

Paytm case study

But Paytm did not get disturbed, it started to work on the improvement strategy and improvement cycle.

The first problem was about the Login System which was asking the OTP again and again to login. The user needed to enter the email id or user id and password again and again whenever he wanted to make any online payment transaction via Paytm.

This was such an irritating step and VSS knew that if this will keep happening he will lose a big of potential customers.

He introduced a wallet system inspired by Jack Ma, who is the founder of Alibaba. Paytm Wallet was not based on a login system often, once you create a Paytm Wallet and log into it, the second time it will be opened without login until you log out yourself.

One another glitch was created by Paytm with the Logo of Paytm, the color combination and design is getting matched with Paypal, and Paypal did not agree to this, because Paypal is the biggest online payment transaction company of the world.

Paytm vs Paypal - Paytm case study

Paypal Filed a legal case against the Paytm Business Model in the court, Paytm tried to convince Paypal, but it did not respond, and the case is still running, not concluded yet.

This is not the end, one more problem of fraud and chargeback is still alive for Paytm and as a solution of this problem, Paytm is building face recognition technology.

Apart from this, many developments are under pipeline like Issues of Cross Border Transaction, Card Data Security, Multi Currency Transaction, and many others.

Paytm Business Model

Achievement of Paytm

With the implementation of a constantly improving strategy, a time came when the Paytm business model was attracting the billionaires and millionaires of the world.

Jack Ma, who is the founder of Alibaba, was too eager to become a partner of Paytm by observing the business model of Paytm, revenue model of paytm, and the Business Growth of paytm.

He acquired the 40% shares of Paytm business model, and not only Jack Ma, the king of share market sir Warren Buffet also was too impressed by Paytm Revenue Model and Paytm Business Model.

Sir Warren Buffet and Indian Industrialist Mr. Ratan Tata also registered their shareholding with Paytm.

You can imagine the achievement of Paytm by the investment of Sir Warren Buffett in the Paytm Business Model, because Warren Buffet never invested in a technology company.

Paytm is the first technology company of India and the World as well, in which Warren Buffet invested.

This is not a small achievement that the biggest business tycoons of the world invest their valuable money and time in your business.

One thing is sure that all investors who invested in Paytm must have gone through the Paytm Case study and journey, and then concluded to invest in Paytm Business Model, so that it’s too inspirational for those who want to startup a new business nowadays.

Conclusion

Scaling up a business is not a big deal if you have proper strategy, future vision, you are aware about the current problem of people and upcoming possible problems.

Because every problem has a package deal, it comes and brings a great opportunity with it as well. Vijay Shekhar Sharma is working in the present by thinking about the future and that is one of the most responsible reasons for the massive success of Paytm Business Model.

When Paytm was started, it provided an online money transaction by just using an E-Wallet where the people can save their money and transact to anyone.

But today, if you see Paytm, it has introduced itself as a bank also, and we are using the Paytm Bank as well.

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