BENGALURU: Digital payments major Paytm’s annualised gross transaction value (GTV) crossed $20 billion (about Rs 1.3 lakh crore) in February, a fourfold increase from March 2017 as it captured a bigger share of consumer spending across areas such as travel and movie ticketing.
Paytm is also on track to register one billion transactions every quarter, based on the number of transactions the platform recorded in February, said chief operating officer Kiran Vasireddy. “Last year, we were doing $5 billion worth of transactions, which has now grown to $20 billion,” he said.
Gross transaction value represents the gross value of services and products sold on the platform, and does not indicate net revenue or profit.
The company, which is backed by China’s Alibaba Group and Japan’s SoftBank, is transitioning into a broader financial services entity by venturing into investment advisory and insurance as it prepares to battle global giants including Google and Facebook-owned WhatsApp.
Calculating back from Paytm’s 1.5 billion transactions recorded for 2016-17, average transaction value on the platform has increased by 50%—from $3.3 to $5. This happened as the company widened the scope of transactions on its platform to include payments for highway tolls, traffic fines and even ‘dabbawalas’ in Mumbai, as well as roped in brick-and-mortar retailers to accept digital payments from its users.
“Our offline merchant base has grown to 7 million from 1 million at the beginning of 2017. About 50% of these merchants are from beyond the top cities. We have offline merchants in 600 districts across the country,” Vasireddy said.
To put Paytm’s numbers in perspective, compare them with debit card transactions at point of sales terminals. In January, the total number of debit card transactions across India was about 300 million, RBI data show. That’s comparable with Paytm’s more than 300 million transactions in recent months. In terms of value, however, debit cards scored higher with transactions worth Rs 40,000 crore, or $6.2 billion, in January.
Vivek Belgavi, partner for fintech at consultancy firm PwC, attributed Paytm’s rapid increase in transactions primarily to its “capability in driving online-to-offline business, which is directly correlated to the 7 million merchant base that Paytm has created. This base can help increase awareness of digital payments and also encourage customers to move from cash to digital for small-value transactions.”
As for the Reserve Bank of India’s mandate requiring digital wallet providers to verify all customer details as per its full know-your-customer guidelines, Vasireddy said the impact on the company’s transaction volume was negligible. Industry experts suggest RBI’s mandate could reduce the user base of wallets by 80-90%.
Paytm embarked on verifying customer details much before RBI’s February 28, 2018 full KYC deadline in its endeavour to become a payments bank, Vasireddy said. “We had already embarked on the KYC process for our customers for our banking activities and we have developed a large network that was used to get the KYC of our users, hence the move has not impacted us,” he said.