Paytm: Pioneering Cashless Transactions in India

Abstract:

Paytm launched as a prepaid-mobile-recharge web based company in January 2010 was founded by Vijay Shekhar Sharma who was known for his never give up attitude. It was the time when millions of Indian customers who were entering online payment process, but there were billions more who were averse towards online payments. While Sharma was grappling to increase his customer base, he struck luck when government announced the ban of two of the country’s largest banknotes on November 8, 2016. Paytm made great business when Indians fed up of standing in long queues to exchange currency signed up for Paytm as the best alternative. Moreover, Paytm also received the regulatory approval to launch its Paytm Payment Bank in December 2016. Despite the luck and Paytm’s first-mover advantage, Paytm faced stiff competition from its already existing rivals as well as from the commercial banks which were starting off their own version of online payments. The case discusses if Paytm was successful in thwarting its competition and what strategies it took to beat the competition

Issues: » Apply the importance of first mover advantage: » Understand the importance of continuous innovation. » Apply the importance of first mover advantage. » Evaluate ways a company can increase its customer base, by bringing in new technologies. » Evaluate the impact of regulations on a business. Introduction By the end of November 2016, Paytm, an Indian e-commerce and payment system company, had registered more than 7 million transactions per day and was on track to complete 2 billion transactions in 2016. Vijay Shekhar Sharma, (Sharma), chief executive and founder of Paytm, said the company’s business had increased manifold after the Indian government banned the use of high value currency notes in the second week of November 2016. This move prompted people to switch over to cashless transactions and Paytm, being one of the widely used digital payment systems in the country, benefitted immensely....

Key words:
Mobile wallet, Online payments market, Visa, Mastercard, Rupay, Vijay Shekhar Sharma, Customer trust, Bus ticketing, Immediate Mobile Payments Service, 10-second gateway, Tier II and Tier III cities, Reserve Bank of India, Alibaba group, Movie theaters

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