November 2016 was a nightmare to many Indians with Prime Minister announcing the shocking news of demonetisation. People were forced to stand in long queues at ATMs and banks to exchange the currency. While the move troubled almost all the Indians, there is one organisation which reaped the fruits of Modi-government’s decision. Paytm, the payment wallet, one of the products of One 97 Communications Ltd founded by Vijay Shekhar Sharma hit 200 million users days after the most controversial decision taken by the government. Besides which, Vijay also featured in TIME magazine amongst the top 100 most influential people in the world. The CEO also threw a big party to his employees making bold and provocative comments welcoming criticism. He also set a target of 500 million by 2020. Didn’t he and his team reach the target? However, the employees at Paytm and the markets analysts now have a different story.
With the booming market for digital payments which is being led by Unified Payments Interface (UPI) platform, market analysts now opine that the soaring business model of Paytm which once established a monopoly has now become obsolete. Paytm is facing major competition from PhonePe, Google Pay and others for offline payments and individual transactions. Making situations more difficult for the company, large companies and small startups from Reliance Industries to Facebook to Razorpay are launching UPI-based products. While the users are more inclined towards UPI platforms, usage of wallets like Paytm has been witnessing a downfall from the past few months.
According to the latest data from the Reserve Bank of India (RBI), wallet transaction value dropped to ₹15,109 crore in October 2019, from ₹18,786 crore. By the time Paytm jumped into the UPI platform, Google Pay and PhonePe are racing ahead, forcing the company to spend hundreds of crores on cashbacks to stay in the competition. Meanwhile, WhatsApp launched payments on trial in February 2018, upon which Sharma faced allegation Sharma of lobbying the government to bar WhatsApp from launching its payments service. Rounding this off, even a section of employees at Paytm confronted that their main heads have been turning a blind eye to many crucial matters as it has been registering growth and investments.