How does PAYTM company work and what are their revenue/business model
We all know that in previous few years, many companies as a startup opened some of them are still exist and some of them extinct. Over past two years, some startup makes a mark in the market among the people. Such as OYO Rooms, Mobikwik, OLX and much more, in this Paytm an e-wallet company change the Indian market, it is the part of one97 communication.
First of all the man behind PAYTM is Vijay Sharma, he started his company in 2000 as a mobile recharge after then he expanded his company with 8 lakh, later he make his company name and his name as a brand. Paytm has many rivals but no one stands in front of paytm. The company gets the best startup of the year award, best business model and so on. The evaluation of the company is $5 Billion and holds the good reputation in the Indian market. If we google about paytm business model then there are many posts will hold the screen.
We will cover some interesting topic of paytm i.e how paytm makes money, how paytm become giant, the business model of paytm.
Let’s explore HOW paytm company make its destiny and win the trust of million hearts.
Also read, How Much Money Do Uber Drivers Make?
How paytm works
If we open paytm app then there is many option figure come, first we will talk about a recharge. The company give their profit to their customers in name of cashback. While recharge from ordinary shop and recharge from paytm it will give you much difference.If we recharge from any shop then company give 0.25% to the shop owner, instead of that if we recharge from paytm then the communication company give 3-5% to the paytm which they return as a cashback. This is how paytm one “tab” works. Other than the paytm gives services in paying electricity bills, recharge DTH users in the metro station, fees, for broadband services, insurance facility, petrol pump bill, in toll tag from their the paytm makes money on the commission basis.
Recently new two features added in paytm
In new update the paytm come with two big features i.e google play store and VIP upgrade, Here what paytm helps to buy the app from android playstore is easy we just select the cards and make payments. But paytm make this little easy now we can add money to playstore and make the payment after choosing to redeem option, now its helps in saving time, no need to pay from card every time. Now if we look the other features paytm VIP upgrade then this is more helpful to us we can now increase our spending limits, earlier it was limited only 5000 which was assigned by RBI, If we do KYC then we can increase the wallet limit also from 20,000 to 25,000 that is important to us. But now we have to submit our Adhar number and get a sign in into the paytm new services which include unlimited spending, unlimited offers and instant cashback&Refunds after registering we have to go to KYC centre for verification after this method now you are paytm VIP upgrade.
How paytm makes money from e-wallet and e-commerce
After this, if we talk about paytm wallet then it is the secure payment gateway and the paytm get the license from RBI as a small payment gateway bank. From a wallet, they make a profit from the bank as an interest and TDR(transaction discounting rate). If we look the new update of paytm in few years, the company entered in e-commerce platform here the company also gets profit from seller also. As they sell products on a commission basis, Suppose if the price of an X is Rs 80 so they take a commission on X if they order in bulk, they buy the bottle in Rs 15. Here how the company makes Rs 5 as profit, like this they make their profit from million of products and sometimes they gave some cash back from their profit.
How paytm makes money in travel
As paytm wants to expand their business in every sector, they want paytm in each corner of India that’s why they didn’t leave the travelling also. After seeing many travel company they come up with new features that are book air ticket, movie ticket and amusements ticket. From here if you open the app of any airline company they show the ticket of Rs 2300(Bangalore to Delhi) and paytm rise the value of figure they show Rs 3000 and in cashback they give Rs 500 as cash back if you apply any promo then 3000-500 it will be 2500 and here how paytm profit is 200, after that if we look the profit in movies ticket as he gave to their customer as a cashback or as a gift.
How did demonetization give paytm business growth
Before demonetization the paytm was in loss of 1500 crore in financial year 2k16 later, one announcement of PM Modi makes the paytm as the giant profit after demonetization in India many e-wallets come in the market but still paytm didn’t give up, they make their market excellent. No other e-wallet company with great features face the paytm services. They gave many offers to their customers, in an interview the paytm CEO Vijay Sekhar Sharma said that, in demonetization the paytm was doing 7 million transactions in 12 days and make the profit of 120 crores per day, which the paytm evaluation last year the paytm evaluation was $2 billion and now the company achieve its target before deadline and now the evaluation of company is $5 billion .Now the paytm founder Vijay Sekhar Sharma declared as a chairman of IMAI. Actually, the great features of paytm are its barcode, we have to only scan the barcode.
Fianlly the business model of paytm is profitable and for some time it gets in the loss but in demonetization, the company profit is in the sky and raise the funding of Rs 4396 crore.