Reference no: EM133675452
Assignment:
Paytm is India's one of the biggest fintech startups founded in August 2010 by Vijay Shekhar Sharma. The startup offers versatile instalments, e-wallet, and business stages. Even though it began as an energizing stage in 2010, Paytm has changed its plan of action to become a commercial center and a virtual bank model. It is likewise one of the pioneers of the cashback plan of action.
Paytm has changed itself into an Indian mammoth managing versatile instalments, banking administrations, commercial center, Paytm gold, energize and charge instalments, Paytm wallet and many other provisions which serve around 100 million enlisted clients.
The areas served by Paytm are India, Canada, and Japan, it is also accessible in 11 Indian dialects. It offers online use-cases as versatile energizes, service charge instalments, travel, motion pictures, and occasions appointments. In-store instalments at markets, leafy foods shops, cafés, stopping, tolls, drug stores and instructive establishments can be accessed through the Paytm QR code. One 97 Communications, the parent company of Paytm, is all set to raise its capital target of over ?16,600 crores ($2.2 billion) through an IPO that it had filed earlier in July 2021. Paytm is seeking to raise $25 billion to $30 billion valuation post this IPO.
According to the organization, more than 7 million traders crosswise over India utilize its QR code to acknowledge instalments straightforwardly into their bank account. The organization uses commercials and pays a special substance to produce income.
Business Model of Paytm
Paytm or "Payment Through Mobile" is India's biggest instalment, trade, and e-wallet undertaking. It began in 2010 and is a brand of the parent organization One97 Communications, established by Vijay Shekhar Sharma. It was propelled as an online portable energize site and proceeded to change its plan of action to a virtual and commercial center bank model.
The organization stands today as one of India's biggest online portable administrations that incorporates banking administrations, commercial centers, versatile instalments, charge instalments, and energize. It has so far given administrations to more than 100 million clients.
Paytm's enhancement has built a solid reputation and has turned out to be praiseworthy for some in the online instalment industry. One of its increasingly vital accomplishments is in its joint effort with the Chinese web-based business Goliath, Alibaba for immense measures of subsidizing.
Aside from being a pioneer of the cashback plan of action, the organization has been commended for its introduction as a new business able to build huge partnerships in a limited time period.
Clients of Paytm Business
Paytm's core focus is on serving its Indian client base, especially the cell phone clients. Numerous Indian clients saw the computerized world as an opportunity to open a financial balance. Accessing simple online instalments missed the mark, and clients wound up with only poor experience. Paytm presented itself as a superior option to deal with such situations.
Paytm's Channel for Business
Paytm utilizes numerous channels to draw in clients. Aside from its very own site which drives clicks, Paytm has shaped associations with numerous customers and seller destinations that support its endeavour. Demonetization in India enabled the organization to succeed altogether and arrive at new clients too. Disconnected advertising is likewise a piece of their client procurement process.
Structure of Costing
Paytm serves numerous clients which is the motivation behind why it is so cost-driven. The vast majority of its costs are identified with its foundation and client obtaining. It's a typical cost-shared by numerous organizations over the reality where client securing cost is significant.
he cash utilized in this procedure is higher than the income it makes in its underlying buys. Most of its financial limit is to put resources into sloping up of its security and stay away from the danger of misrepresentation, particularly when it needs to deal with more than 65 million clients in its foundation. It incorporates a framework that empowers clients to avoid any tax evasion hazard.
Revenue Model of Paytm
The Paytm revenue models come in two structures. Paytm makes commissions from the client exchanges through their utilization of its foundation. Escrow Accounts are the accounts from where it creates their income. Inferable from the non-appearance of its hidden capital, it offers clients no intrigue. Starting in 2018 Paytm has aggregated 3314.8 crore INR in income.
Paytm Wallet
Paytm wallet is one of Paytm's best benefits that structures a connection between the bank and the retailers. This semi-shut wallet empowers you to take care of your tabs, pay for your tickets, or pay anyone concerned. Paytm wallet separated from its profit, as approved by the RBI, has the advantage of accepting enthusiasm for a purchaser store, much the same as some other Payment Gateways.
When you store a specific measure of cash in your Paytm wallet, it will at that point set aside that cash in another bank from which it will win enthusiasm eventually.
It is the Paytm wallet's fundamental capacity. For instance, suppose you make an instalment of Rs. 1000 to a merchant and the vendor makes 10 exchanges to increase Rs. 10,000. If the instalment of that sum is made through the Paytm wallet, the Paytm wallet will take a portion of about 1% of the aggregate sum. So, the merchant will get around Rs. 9715.
Mobile Recharge Business
Since its origin in 2010, Paytm's underlying intention was to give online portable energizing administrations. Its capacity to create income was constantly shortsighted. Paytm's administration guidelines are as praiseworthy and proficient as those of other telecom specialist co-ops running from Vodafone to Telecom.
The administrations are without shortcomings and give solace to their clients. As of now, Paytm increases a commission of 2-3% per energize. It is because Paytm, attributable to its support to its client to keep reviving through its foundation, has more grounded power in dealing than different merchants. That is the reason the commission it obtains is so high. This commission from its revive administration fills in as its income.
These administrations have supported the organization essentially in extending its base and thus, developing exponentially. When the client is fulfilled by the administration or item, he makes an arrival to a similar undertaking in this manner. This way Paytm does client maintenance and produces more traffic. Paytm has used this methodology to further its potential benefit and keeps on reaping positive results.
Paytm Digital GoldPaytm Digital Gold
Inferable from its organization with MMTC-PAMP, the outstanding gold purifier, Paytm has propelled "Computerized Gold". This model enables clients to sell, purchase, or store gold in an advanced stage. Presently, clients need to pay at a rate just to get their gold conveyed to their families.
Paytm is very much aware of how much gold is put as a resource in India and is completely arranged to develop from this chance. The organization has made eminent arrangements to urge its clients to get their own Gold Bank Accounts individually. This record separated from empowering clients to purchase their gold will likewise furnish clients with simple access to other Paytm administrations.
Paytm Mall
In February 2017, Paytm propelled its Paytm Mall application which enables purchasers to shop from 1.4 lakh enrolled sellers. Paytm Mall is a B2C model enlivened by the model of China's biggest B2C retail stage, TMall. For 1.4 lakh merchants enlisted, items need to go through Paytm-guaranteed stockrooms and channels to guarantee buyer trust.
Paytm Mall has set up 17 satisfaction focuses crosswise over India and joined forces with 40+ messengers. Paytm Mall raised $200 million from Alibaba Cluster and SAIF Partners in March 2018. In May 2018, it posted losses of roughly Rs 1,800 crore with an income of Rs 774 crore for money related to the year 2018. Moreover, the piece of the pie in Paytm Mall dropped to 3% in 2018 from 5.6% in 2017.
Based on the case study mentioned above, if you are presented with an opportunity to commence business as a startup Fintech company in India. What would be your considerations regarding the following areas:
1. Business model of the Fintech start-up.
2. Target clients
3. Proposed Revenue model
4. What could be the possible challenges that could be faced by the business in the coming years based on the current state of the Fintech industry (more specifically, online retail payments industry) and what are the possible measures that could be taken to minimize the impact of the challenges?