3. Problem: Financial Inclusion
• Population: 1.3 billion
– 60% Unbanked
– 90% Small businesses no link to formal financial institutions
– Only 3.6% households undertake cashless transactions
– 600M with net-banking facilities
– 20M credit cards, 350M debit cards
– Underbanked : rising incomes, limited access to traditional
financial services
– 60% own mobile phones
– 60% projected to own smartphones by 2019
– In 2015, 34.1% of mobile phone users accessed the internet
from their mobile phone. This figure is expected to grow to 47.4
percent in 2019.
* Sources: Statista and Economic Times/India Development Fund
4. “A secure digital wallet that lets you manage your money;
recharge, pay bills, shop on Paytm, send money to friends
& pay for various brands & services like Uber, MakeMyTrip,
BookMyShow and many more.”
Paytm wallet. What’s that?
5. Paytm wallet
• First mobile wallet provider to also run a
mobile marketplace
• 95 out of 100 wallets are Paytm
• 120M registered users as of Feb’16
– India has about 135 million wallet users
(6Wresearch)
• 2.5M transactions per day, on average
• 150,000 merchants on board
• Monthly limit set by RBI
– Rs. 10,000 w/o KYC , Rs. 1 Lakh with KYC
6. Paytm
• 2010: Incubated by One97
Communications as a prepaid
mobile recharge website
• 2013: Immediate Payment
Services (IMPS) using Mobile
number and Mobile Money
Identified (MMID)
• 2014 : Mobile marketplace
• 2015 : Offline Payments,
Paytm Marketplace $1B Gross
Merchandise Value (GMV)
• 2016 : Payments Bank
7. Board of Directors
• Vijay Shekar Sharma, Founder & CEO
• Ravi Adusumalli, SAIF Partners
• Vivek Mathur, SAIF Partners
• Jing Xiandong. COO, Ant Financial Services Group
• Peng Yijie, President, Alipay International
• Ruchi Sanghvi, Investor and Adviser
• Naveen Tewari, Founder, InMobi
• Neeraj Arora, Global Business Head, WhatsApp Inc.
• Ratan Tata, Chairman of Tata Sons
• Jai Das, Managing Director, Sapphire Ventures
8. Investors
• Alibaba Group owns 40% stake in Paytm
($680M)
• Silicon Valley Bank
• SAIF Partners, Hong Kong based PE firm
• Sapphire Ventures, an expansion-stage VC firm
• Ratan Tata, Tata Group
9. Network Externalities
• First mover advantage
• Difference between the payment gateway
business and the mobile wallet business is
that the mobile wallet provider owns the
customer.
• More wallet customers merchants are
keen to partner with the wallet provider.
• Network effect as technology moat
• Winner takes all ?
10. The ‘Tech’ in FinTech
• Leapfrog to mobile wallets
• Transfer money online or deposit cash to Paytm Wallet
- Use “Pay-in-slip”, Paytm reference (mobile) number
- Virtual account number (PAYTM+Mobile number) and IFSC Code with amount
• Top up Paytm Wallet from an ATM
• Cash on delivery (Flipkart) Payment on delivery (Paytm)
• Scan and pay using QR-code
– No data connection needed, merchant gets SMS confirmation
• Paytm wallet for Uber and Pizza
– RBI mandates two-factor authentication for ‘Card-not-present’ transactions
• Bug Bounty
– Independent security groups or individual researches report potential security flaw
• Paytm ‘Payments bank’
– RBI approves a new type of bank
– Accept deposits and offer payment services
– Customer savings account up to Rs. 1 Lakh
– Service SMBs, migrated labor and low income households
– No lending activities
– To be located in rural ‘unbanked’ areas
– Deposits can be invested in government bonds
11. Partnerships
• The Mobile Store, 2-hour express delivery of smartphones
• Uber
• Indian Oil, pay at the pump with Paytm
• Makemytrip
• Bookmyshow
• IRCTC, Metro card
• Quick Service Restaurants (QSRs)
• FoodPanda
• Paytm – ICICI virtual prepaid cards
• Tie up with Insurance companies
• Tie up with LendingKart to provide collateral free business loans to
SMEs and merchants
13. Business Model
• Revenue
– Mobile, DTH and Data card recharge
– Bill payments
– Ticketing
– M/E-commerce marketplace, merchant subscription fees
– Payment gateway, telco commissions 2-5%
– Paytm deals and coupons, customer fees
– Wallet to Bank transfer, customer fees
• Solution
– Bargain power
– Unified dashboard
– Catalog & Inventory Management
– Promotions
14. Paytm Roadmap
• Zero transaction fee for Consumer-to-merchant offline wallet
transactions as of Feb’16
– Fee: 0.5% to 1.75%, depending on merchant service provider
• Reserve Bank of India (RBI) approved ‘Payments bank’ (for 18-
month ‘provisional period’)
• Slide and Share
• Transaction Chat, text and remind friend
• View transactions Personal Finance Management
• ‘Sound pay’ feature
• Facial recognition technology (‘Smile to Pay) to secure mobile
transactions
• Hyperlocal (Grocery) delivery in Bangalore
• iPhone market share in India is just 2% Apple Pay is not a
contender.