Tuesday, February 27, 2024

Difficult path for Paytm, 15 years long journey, what will be the impact on common people?

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There was a time when no one in India could think of buying groceries or everyday vegetables without cash. Forget paying the fare for auto rickshaw etc. in digital mode. Then a name emerged, Paytm, which made Indian people addicted to digital transactions. Today, the market capitalization of Paytm-owned One97 Communications Limited is Rs 38,600 crore. After the latest decision of the Reserve Bank of India, its valuation has declined by Rs 9,700 crore.

RBI has imposed many bans on Paytm. Fintech companies cannot deposit new funds after February 29, and there is a ban on adding new customers after March 11. In such a situation, in everyone’s mind Paytm And his business is booming. Paytm has been in operation for 15 years but its business model was not as it is seen now.

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Paytm’s entry in 2009

Vijay Shekhar Sharma, a resident of Aligarh in Uttar Pradesh, started One97 Communications Limited in 2000. This company worked in the field of mobile content. Vijay launched Paytm in 2009, changing the business model of the company. Under Vijay’s leadership, Paytm moved away from mobile content and became the uncrowned king of digital transactions.

Funding in Paytm

Paytm started operating in Noida with an initial investment of $2 million. In 2011, the company received funding of $10 million from Sapphire Ventures, while in 2015, Chinese e-commerce company Alibaba Group made a major investment in Paytm.

Alibaba’s affiliate company Ant Financial Services Group captured 40 percent of Paytm. The company also got the support of global investors like SoftBank and Berkshire Hathaway, which helped the company a lot in increasing its valuation.

Paytm business

Paytm started providing payment gateway facility in 2012. After this, in 2014 the company launched Paytm Wallet, which became the turning point of Paytm business. Raising the slogan of Digital India, Paytm provided the facility to people to make cashless payments. In 2015, Paytm started providing facilities like QR code, movie tickets and bill payment etc.

In 2017, services like Paytm Payments Bank, Paytm Gold, Events Ticket and Paytm Fastag were released. In later years, things like Paytm Soundbar, UPI Lite, Paytm SBI Credit Card also entered.

Shareholders of Paytm

Paytm MD Vijay Shekhar Sharma is its largest shareholder with 19.40 percent shareholding. Antfin (Netherlands) Holding has 9.89 percent stake in it, which has links with China.

Top 10 shareholders of Paytm-

(Credit: Paytm)

Paytm during demonetization

In 2016, Prime Minister Narendra Modi announced the demonetization of Rs 500 and Rs 1,000 notes. People suffering from cash shortage were encouraged to do digital transactions. During that time, Paytm had praised this initiative by printing the photo of PM Modi. This ad of Paytm became quite popular, and many people attacked this ad fiercely.

Despite all this, Paytm’s famous campaign ‘Paytm Karo’ became a hit across the country. This gave tremendous popularity to Paytm.

Paytm IPO

Paytm successfully launched IPO in November 2021. With this the company has received a huge fund of Rs 18,300 crore. This was one of the most successful IPOs of India. After this the valuation of Paytm reached 20 billion dollars. This investment shows that during that time investors expressed full confidence in India’s rapidly changing financial market.

Paytm users

Paytm is not used only for transferring money. With this you can do things like phone recharge, electricity bill payment, gold purchase, buying mutual funds. However, Paytm is not limited to this only.

Small shopkeepers of the country use the merchant service of Paytm. Apart from this, many companies use Paytm’s payment gateway on their websites-apps to transfer money online. In this way, Paytm is very important for the common man as well as the business.

What will be the impact on common people?

In view of the ban imposed by RBI, not only investors but also common Paytm users are worried. However, company MD Vijay Shekhar Sharma clarified that this ban will not have much impact, and the company will comply with RBI orders.

Vijay told that RBI’s ban is only on Paytm Payments Bank. Therefore, the company will continue to provide services to the users in collaboration with other banks. At the same time, Paytm COO Bhavesh Gupta says that the ban will not affect equity and insurance.

Paytm’s plan is to promote Artificial Intelligence in financial technology. Last year, Paytm founder Vijay Shekhar Sharma launched ‘VSS Investment Fund’ of Rs 30 crore to invest in Artificial Intelligence (AI) and Electric Vehicle (EV) startups.

At present, the market capitalization of Paytm is decreasing rapidly, but Paytm founders have expressed their intention to move forward by giving a latest statement. Now it remains to be seen how much investors trust the company with market capitalization of Rs 38,600 crore.

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