Paytm Case Study (Detailed Business Model)

2 Minute Summary

Paytm one of the biggest Fintech Company of Indian which has become a case study for Harvard University students. Revenue of Paytm was 3579 crores that is 500 million dollars in 2019. Paytm earns throughs varios business like Market Place which it runs by the name of Paytm Mall, and other recharge services, bill payment, Ticket Boking services as well. Paytm also have its Payment Gateway Solution which it charges a decent amount on every transaction. If we fututer go paytm has it wallet services and also they have released a digital gold services by which you can buy gold online.Now, they have launched their paytm payments bank which further increase their valuation. For detail information you can read the blog or watch our video.

People often ask me how do I gather all the data about different business models for my Youtube channel( Intellectual Indies)

So I thought How about I assemble all the details about all the business models on my website lapaas.com. 

After reading this blog, I am sure you’ll get all the details about the Business Model of Paytm from Funding to How do they earn.

Paytm is India’s Biggest platform in the e-wallet industry and e-commerce platform.

Started by Vijay Shekhar Sharma in 2010, Paytm changed its business model to a virtual bank model, marketplace and gold e-wallet.

Vijay Shekhar Sharma is an engineer from the Delhi College of Engineering and today he is worth $2.6 Billion.

One97 Communications Ltd of Paytm’s Parent Company got their first institutional investor, venture capital and SAIF Partners in the year of 2007. Berkshire Hathaway confirmed investment of $356 Million for 3% – 4% Stake in Paytm in August 2018 and it was confirmed by Berkshire company that Warren Buffet is not involved in this transaction. 

Do you know Paytm serve 100 million users?
They offer Payment Solution to over 7 Million Merchants and allow customers to make seamless mobile payments.

According to an article published by Economic Times, Paytm’s success story has become a case study at Harvard University.

According to Wikipedia, Revenue of Paytm is 814 crores INR (US$120 million, 2017)

But How Paytm Makes Money even after 50% to 100% Cashback?
It’s a worthy question to ask.
Let us first discuss their revenue model one by one.

The revenue model is divided into the following categories:

There was a time when Paytm was into Mobile recharge, bill payments only but today they have 8 Revenue Models.

In this Paytm Case Study, we’ll discuss 8 Revenue Models of Paytm.

How paytm earns money?

Paytm earns throughs varios business like Market Place which it runs by the name of Paytm Mall, and other recharge services, bill payment, Ticket Boking services as well. Paytm also have its Payment Gateway Solution which it charges a decent amount on every transaction. If we fututer go paytm has it wallet services and also they have released a digital gold services by which you can buy gold online.Now, they have launched their paytm payments bank which further increase their valuation. For detail information you can read the blog or watch our video.

Let’s find out.

1 Marketplace(Paytm Mall)

Do you know Paytm is the first company with a mobile-only marketplace in India?

Paytm gives you the leverage to sell on Paytm Mall.

The process is easy, Just sign up and upload catalogue and that’s it.

Commission %= 2.8 from seller

According to Paytm Mall, sales of 20 lakh is generated every day.
Can you imagine?

Also, 90% of payments are prepaid, It has been tested that in Prepaid orders

Possibility of returns is less.

How is your payout from Paytm calculated?

2. Recharge Services

They are linked with all the existing telecom service provider in the market, also metro card can be recharged and a specific commission is fixed. Again Commission 🙂
More user uses Paytm, more Paytm earns.

3. Bill Payments & Ticket Bookings

With the help of Advance technology, the Internet has made our lives simple and Paytm made is simpler.
Save more with Paytm, avail exciting deals & cashback offers while paying a postpaid bill online. Be it Water Bills, Electricity Bills Paytm convert them into lifetime customers 🙂
Ticket bookings and any bill payments and what not!!
But How do they earn?
Commission 🙂 

4. Payment Gateway Solutions

Gateway solution is a one-time investment and mode of revenue is the same.
Commission 🙂
Although Gateway option setup is free along with maintenance charges but company charges a commission of 1.99% on every transaction. 

Top linked accounts

5 Paytm Wallet

Paytm is a semi-closed wallet and it has been approved by RBI (Reserve Bank of India). It can be used to pay for anything and almost everywhere.
According to RBI guidelines, Money deposited by users in Paytm Wallet is deposited into an Escrow Account with a partner bank.

And Interest is decided based on an average of the deposited amount in a certain period ( almost 58 weeks)

Whenever we receive a cashback, why does it stored into a wallet and not into our bank account? There is a reason J
Whenever you transfer money to the bank account, Paytm charge a little commission.

6. Digital Gold

Paytm has launched Digital Gold in partners with MMTC-PAMP allowing users to buy even gold worth 10 rupees. Yes, 10 Rupees and so on.

Paytm has launched Digital Gold in partners with MMTC-PAMP allowing users to buy even gold worth 10 rupees. Yes, 10 Rupees and so on.
How do they earn?
Their commission no matter if the price of gold rises or not
Also, company main motive of Digital Gold was to create a platform where user can buy gold and store it in a digital form but the user can also use the same gold to buy other services, be it recharge or bill payments.

7. Paytm Payment Bank

With the launch of Paytm Payment Bank, Paytm aim to bring banking and financial services to half-a-billion un-served and under-served Indians.
Also, Paytm is linked with financial institutions and banks to sell their products and services like investments, loans etc. They earn a specific commission.
QR codes can also be scanned at various points(issues debit cards).
You can open a zero deposit digital current and savings bank accounts at an interest of 4%p.a.
Balance deposited above ₹1 lakh is shifted to a fixed deposit(FD) at an interest rate of 7% p.a.
How do they earn from a Bank?

 

8. Coupon codes/Voucher cards

They are linked with surplus brands. 

Their whole business is based on commission.
Let’s have a look at some of the data:

Founded	2010
Head office	Noida, Uttar Pradesh, India
No. of employees	13,000
Total Funding amount	2.2 Billion
Investors	Softbank, SAIF Partners, Alibaba Group and Ant Financial
No. of Acquisition	11
APP Downloads	more than 100 Million
Website Traffic	53,540,050 Monthly visitors
NET Losses	Losses swelled to Rs.1606.05 crore
Board of Members Team	8 Members
Competitors	Freecharge, Mobikwik, and RechargeitNow

Also, Ratan Tata is involved in investing in Paytm.
So have a look at some of their Marketing Campaigns:

Kisi ki life asaan Karo #Paytmkaro

Kisi ki Life ka Paytm Bano Campaign:

Involvement of Bollywood: Good Marketing Strategy? Let me in the comment section below: B

URI Surgical Strike Paytm Campaign:

Akshay Kumar says #Paytmkaro for 2.0 Campaign:

Latest Updates:
Rana Kapoor who is the Co-founder of Yes bank is in talks with Vijay Shekhar Sharma – the Founder of Paytm.

Rana Kapoor wishes to sell his own and his family’s stake in yes bank for Rs 1,800-2,000 crore to Paytm.
The investment firm, Rana Kapoor and his family members together control a 9.64% stake in Yes Bank.

Still, there is no confirmation about the news, but both the companies are still negotiating on the price and other related issues.

Leading digital payments service Paytm on Wednesday said it is in the process of hiring over 1,000 engineers, data scientists, financial analysts among other positions for tech and non-tech roles. Paytm in April announced to hire over 500 people for multiple roles, aside from continued hiring in product and technology and the current move is to ramp up recruitments for expanding its financial and wealth management services.

Paytm has grabbed 50 per cent share in the payments to merchants (P2M) segment in India and the financial services platform has emerged as the most integrated payments provider in the fintech space.

 Paytm has just seen a hit by online scammers where 190 Paytm users duped of Rs 1.13 crore on the pretext of KYC update.

Paytm Money, the wealth management arm of One97 Communications, has softly launched a stockbroking feature within the app. The company has been planning to launch a stockbroking service.

 I hope you like this Paytm Case Study, let me know in the comments if I missed out anything.
Paytm Website Audit: Lapaas seo audit

UPDATED ON – 26/4/19

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