They also provide online merchants with a payment gateway to accept online payments which is fully monetizable. Paytm is essentially a payment gateway that lets you pay through any payment instrument like cards, netbanking, wallet and not just UPI. UPI is not monetizable but credit and debit cards are monetizable. The rest is made up of other payment modes like credit cards, debit cards, etc. While PhonePe and Google Pay have higher market share in UPI, UPI makes up only 41% of the payments in value terms. In the financial year 2020, they held about 50% market share of the Person to Merchant (P2M) payments.
Paytm is the largest player in the payments space in India. But it is too soon to tell if they will be very important to the company going forward. Paytm First Games, Mini Apps and Advertising have the potential to be huge revenue generators in the future. The Undecided: Paytm’s cloud business falls under this category.Both of these businesses operate in a hypercompetitive environment and it is unlikely that the company will be a leader in either of these businesses. The Bad Businesses: The company’s ticketing business and most of their financial services like stocks, mutual funds, insurance, gold, etc fall under this category.The Good Businesses: Payments, Lending, Payments Bank and Fastag fall under this category.So let us divide Paytm’s various businesses into 3 buckets – the good businesses, the bad businesses and the undecided. But there are parts of the company’s business model where they are absolute leaders and the opportunity size is large. Paytm is involved in a lot of businesses and not all of them are great or scalable. So, now that we know how the company makes money, do we think that the business is all bad? The answer to that is no. They also charge merchants payment gateway charges, sourcing and collection fees. Under this vertical, they earn brokerage and fees from customers and merchants. Paytm is also one of the leading issuers of Fastag where they facilitate electronic toll collection through RFID technology. They also offer insurance and digital gold on their platform. Paytm money where they offer customers trading and demat accounts and mutual funds also falls under this segment. They also have a platform where they offer loans through other banks or NBFCs. Under this vertical, the company has a payments bank called Paytm Payments Bank through which they offer customers some limited banking services. Financial Services: This vertical currently contributes only 9% of the company’s income but the company’s plan is to grow this vertical to make it their biggest revenue generator.They charge merchants marketing and advertising fee for the ads on their platform. Paytm charges merchants a payment processing fee and for commerce and a hosting fee for mini games. They also charge them a platform fee or a subscription for their first games platform. For the ticket booking, Paytm charges the customers a convenience fee.
They also sell ads on their platform which comes under their cloud services. These are basically smaller versions of ecommerce apps that you can order directly from the paytm app. The company also has mini apps on its platforms.
Under cloud services, the company has Paytm First Games – which is their real money gaming platform where you can play games like poker, rummy and fantasy cricket. Under commerce services, the company offers services like ticket booking for travel like flights, trains & buses and also entertainment like movies and events. Commerce and Cloud Services: This vertical contributes about 23% of their revenues.They also receive rentals for the Soundbox device. They charge consumers a convenience fee in certain cases and charge merchants payment processing fees.
#Who owns paytm Offline
They offer services to merchants like QR codes to accept offline payments, payment gateways to accept online payments and the soundbox that you may have seen in the stores. Some of the payments that customers can make on their platform are mobile and DTH recharge, pay for utilities like gas, electricity and water, pay for their credit cards, etc. Paytm offers customers a platform to transfer money to other people and also pay for various services.
Payment Services: This is the company’s largest vertical and contributes to about 68% of their revenues.Paytm’s services are segregated into 3 main categories: Payment Services, Commerce and Cloud Services and Financial Services. The company has since evolved to provide multiple fintech services and is one of the largest players in the payments space. It was founded by Vijay Shekhar Sharma in 2009 as a prepaid mobile and DTH recharge platform. Paytm is a payments led super app which allows its customers to access financial and other commercial services through its app. Let us take a look to see if that is true. There is a lot of talk about how Paytm’s business is bad.
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