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Paytm

Paytm (short for Pay Through Mobile[4]) is an Indian multinational financial technology company, that specializes in digital payments and financial services, based in Noida.[5] Paytm was founded in 2010 by Vijay Shekhar Sharma under One97 Communications. The company offers mobile payment services to consumers and enables merchants to receive payments through QR code payment, Soundbox, Android-based-payment terminal, and online payment gateway.[6] In partnership with financial institutions, Paytm also offers financial services such as microcredit and buy now, pay later to its consumers and merchants.[5]

Apart from bill payments and money transfer, the company also provides ticketing services, retail brokerage products and online games.[7][8][9]

Paytm's parent company One97 Communications was listed on the Indian stock exchanges on 18 November 2021 after an initial public offering, which was the largest in India at the time.[10] For the fiscal year 2022–23, Paytm's gross merchandise value (GMV) was reported to be inr 13200000000000.[11][12][13][14]

History

Early history; 2010-2019

Paytm was founded in August 2010 with an initial investment of US$2 million by its founder Vijay Shekhar Sharma in Noida, Delhi NCR. It began as a prepaid mobile and DTH recharge platform, and later added debit card, postpaid mobile and landline bill payments in 2013.[15]

In October 2011, Sapphire Ventures (fka SAP Ventures) invested $10 million in One97 Communications Ltd.[16] By January 2014, the company had launched the Paytm Wallet, which the Indian Railways and Uber added as a payment option.[17] In 2015, it added education fees, metro recharges, electricity, gas, and water bill payments.[18] It also launched bus ticketing and travel booking.[19]

In 2015, China's Alibaba Group and its affiliate Ant Financial increased their combined stake in Paytm to 40%, making them its largest shareholders.[20] The same year, it raised funding from Ratan Tata, the MD of Tata Sons.[21] In August 2016, Paytm raised funding from MediaTek's investment fund at a valuation of over $5 billion.[22] Also in 2016, it launched movies, events and amusement parks ticketing,[23] Paytm QR,[24] and train ticket bookings.[25] California-based PayPal filed a case against Paytm in the Indian trademark office for using a logo with a similar colour combination to its own on 18 November 2016.[26]

In May 2017, Paytm raised $1.4 billion from SoftBank, at a valuation of over $8 billion.[27] In August 2018, Berkshire Hathaway invested $356 million in Paytm,[28][29] although Berkshire Hathaway confirmed that Warren Buffett was not involved in the transaction.[30]

In 2017, Paytm launched Paytm Gold, allowing users to buy digital gold.[31] It also launched Paytm Payments Bank[32][33] and ‘Inbox’, a messaging platform with in-chat payments.[34] By 2018, it started allowing merchants to accept Paytm, UPI and card payments into their bank accounts.[35][36] It also launched the ‘Paytm for Business’ app (now called Business with Paytm App) for merchants.[37]

In January 2018, it entered into a joint venture with Alibaba Group-owned gaming company AGTech Holdings to launch Gamepind, a mobile gaming platform.[38] It was rebranded as Paytm First Games in June 2019.[39] In March 2018, Paytm Money was started with an investment of ₹9 crore[40][41] for investment and wealth management.[42]

In March 2019, the firm launched a subscription based loyalty program called Paytm First.[43] In May 2019, it partnered with Citibank to launch Paytm First credit card.[44][45] On 25 November 2019, Paytm raised $1 billion in a funding round led by US asset manager T Rowe Price along with existing investors Ant Financial and SoftBank Vision Fund.[46]

2020-present

In July 2020, Tata Starbucks partnered with Paytm allowing its customers to order food online during the COVID-19 pandemic.[47]

On 18 September 2020, the firm's official app was briefly unlisted from the Google Play allegedly due to violations of the Play Store's gambling policy.[48][49] The company claimed that Google did not offer any prior warning or give the company an opportunity to explain its views on the contentious 'cashback' offers while claiming that Google's own payments app Google Pay offered similar 'cashback' offers and suffered no repercussions.[50][51]

In July 2021, One97 Communications filed a draft red herring prospectus with the Securities and Exchange Board of India to launch its initial public offering (IPO).[52][53] It launched its IPO in November 2021, raising inr 183000000000 at a valuation of US$20 billion.[54] It was the largest ever IPO in India.[55] The shares began trading on 18 November 2021, opening at ₹1,950 on the NSE, 9.3% below the upper band of the IPO price range, and closed down more than 27% at ₹1,560,[56] making it the biggest drop on a listing day in Indian IPO history.[57]

In December 2021, Paytm launched Paytm Wealth Academy.[58] In March 2022, the Reserve Bank of India barred Paytm Payments Bank from signing up new customers after an inspection found that the company was leaking customer data to China-based entities which indirectly owned a stake in Paytm Payments Bank.[59]

On 31 January 2024, Reserve Bank of India, the banking regulator in India, ordered Paytm Payments Bank Ltd to stop the bulk of its activities from 29 February 2024. RBI found that the company did not conduct proper background checks on the source of funds before onboarding clients. This date was further extended to 15 March 2024 as per the updated FAQ.[60] It may lead to 20% work force cut down.[61]

In August 2024, Zomato acquired Paytm's entertainment ticketing business, including the Paytm Insider and TicketNew platforms, for approximately ₹2,048 crore (US$244 million). The acquired platforms would continue operating for up to 12 months during a phased transition, with eventual integration into Zomato's District app.[62][63]

Funding and shareholding

Post-IPO shareholding (as of April 2024):[64][65]

Acquisitions

In 2013, Paytm acquired Plustxt for under $2 million; the platform allowed fast text messaging in Indian languages.[66]

In 2016, it acquired Delhi-based consumer behaviour prediction platform Shifu[67] and local services startup Near.in.[68] In July 2017, it acquired a majority stake in online ticketing and events platform Insider.in, from event management company Only Much Louder (OML).[69] In 2017, it acquired restaurant deals platform Little and hyperlocal e-commerce company nearbuy.com in 2017, and merged the two companies.[70]

Paytm acquired the startup Cube26 in January 2018.[71] In May 2018, Paytm acquired movie ticket booking platform TicketNew from Alibaba Group for around $40 million.[72] It acquired the hotel booking platform NightStay in 2019.[73]

In October 2021, Paytm acquired digital lending company CreditMate.[74]

Other investments

Paytm invested $5 million in auto-rickshaw aggregator and hyperlocal delivery firm Jugnoo in 2015.[75] In 2016, it invested in logistics startups LogiNext and XpressBees.[76][77] In April 2017, Paytm invested in healthcare artificial intelligence (AI) startup QorQL.[78] It also invested in mobile loyalty program and analytics startup MobiQuest.[79]

International expansion

Japan

Paytm established a joint venture with SoftBank and Yahoo! Japan, called PayPay Corporation, to offer services in the Japanese market. Paytm launched the PayPay app, a QR-based payment settlement service, in Japan on 22 October 2018.[80]

Canada

Paytm Labs Inc. was established in Toronto, Ontario in 2014 as a research and development division.[81] It recently launched a fraud risk management platform called Pi for fintechs and digital marketplaces where transaction value is high.[82][83][84]

Controversy

In May 2018, the Indian investigative news agency Cobrapost released a video of an undercover reporter meeting with Paytm's vice president, Ajay Shekhar Sharma who is the brother of Vijay Shekhar Sharma.[85][86] During the meeting, he reportedly said the company had provided the Government of India with the personal data of Paytm users in the Indian state of Jammu and Kashmir, violating user's privacy and policies.[87][88] Later, BuzzFeed reported that, Sharma has close ties with India's ruling party Bharatiya Janata Party.[89] Meanwhile, in response, the company tweeted that, it had never shared user's data with third parties, denied the contents in the video, and stated that it had never received requests from law enforcement on Twitter.[90][91] Paytm also stated that any person claiming otherwise "is not aware of the policy and is not authorised to speak on behalf of the company".[92][93]

Charity

During the COVID-19 pandemic in India, Paytm announced that it would contribute ₹10 to every user paying to the PM CARES Fund via its app; within ten days, it reported a total collection of ₹100 crore. The company also announced that its 1,200 employees contributed 15 days or even a few months of their salaries to the fund.[94] In April 2021, Paytm claimed that it had made 21,000 oxygen concentrators available for people in need through its app,[95] and donated oxygen plants in 13 worst-hit cities to help hospitals get oxygen.[96]

See also

External links

References

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