New Delhi

In 2000, after receiving a loan worth 8,00,000 rupees ($9,000), Vijay Shekhar Sharma founded Paytm's parent organisation – One97 Communications, which offered digital goods and services. Later in 2010, with an initial investment of $2 million, Sharma launched Paytm, an acronym for 'pay through mobile,' which started as a prepaid mobile and DTH (direct-to-home) recharge platform headquartered in Noida, India.  

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In less than ten years, Paytm has developed into one of the most valuable financial start-ups in the nation.    

In 2014, the Paytm Wallet became one of India's most popular digital wallets. The following few years saw Paytm grow its user base and enter the e-commerce space by enabling online shopping and ticketing. Digital payments surged in 2016 after India demonetised 500- and 1000-rupee notes.  

"Paytm Karo" became the infamous tagline that every Indian was familiar with when thinking about online shopping after demonetisation.  

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Paytm was the first payment app in the nation that achieved 100 million downloads in 2017. As of March 1, 2021, Paytm had 1.2 billion monthly transactions and more than 150 million active users.    

With a 15 per cent month-over-month gain, the digital payments giant now holds the largest market share in the offline merchant payments sector. The business has expanded into several services, including ticketing for movies and flights, gold sales, insurance, bank deposits and remittances.    

IPO Listing    

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In 2021, Paytm made history by conducting India's largest Initial Public Offering (IPO). Its initial public offering exceeded Coal India's IPO of Rs 15,200 crore ($1.8 billion) in 2010.  

After completing the IPO, Paytm's founder Vijay Shekhar Sharma broke into tears during his speech at the Bombay Stock Exchange (BSE), as per a report by NDTV.  

The company surpassed the market capitalisation milestone of Rs. 1 lakh crore ($12 billion). The digital payments company's market cap on the BSE touched Rs. 1.19 lakh crore ($14 billion).  

Purchase of stake from Antfin    

In August 2023, Paytm's CEO announced that he intends to purchase a 10.3 per cent stake from Antfin, an Ant Financial subsidiary, for $628 million. This move aimed to streamline ownership within the Indian payments firm. Following the announcement, Paytm's shares surged by 11.4 per cent, having already risen over 50 per cent in the year. Antfin (Netherlands) Holding B.V.'s acquisition price is 796.6 rupees ($9.3) per share, mirroring Paytm's recent closing price. This purchase will reduce Antfin's ownership to 13.5 per cent, relinquishing its status as the largest stakeholder. Notably, China's Alibaba sold its entire stake in Paytm in February, while Softbank Group Corp has gradually lowered its stake, now at 9.18 per cent. After this acquisition, Sharma, Paytm's founder, will become the primary stakeholder with 19.42 per cent.    

The success of Paytm  

Research by International Journal for Research in Engineering Application & Management attributes Paytm's success to its revenue model and innovative strategies to enhance its services in the Indian digital financial services sector.  

Revenue model  

A diversified revenue model of Paytm has played a huge role in its growth and market leadership. By adopting various revenue streams, Paytm has ensured financial stability and catered to different user base segments.  

For instance, the advertising revenue model allows sellers to promote their products on Paytm's platform for a fee. The subscription model lets sellers pay an annual subscription fee to list their products. And Paytm's advance payment model capitalises on customer payments by accruing interest until funds are transferred to sellers.  

Innovative strategies    

What began as a platform for online bill payments has evolved into a comprehensive mobile money solution, including the establishment of Paytm Payments Bank. This initiative bridges the gap for individuals needing access to traditional financial services. The launch of the Paytm for Business app and banking features targeting corporate customers exemplify Paytm's versatility and adaptability to varying market demands.

Paytm was among the first financial companies to push for cashless transactions by making digital payments through a unified payments interface (UPI), which has presently proven to be a huge success.

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