India's One97 Communications has a wide range of ambitions in the rapidly developing country. We examined its strategy to dominate digital money and the broader financial services space, as well as the many competitors that are also vying for a share of the pie.
Mobile internet company One97 Communications is one of India’s most well-funded and valuable companies. In May 2017, when Softbank Group led a $1.4B corporate minority round into the company, it valued the startup at $7B. More recent numbers, after a sale of secondary sales, peg the company at a valuation of $10B.
The firm operates multiple entities, including Paytm, India’s largest mobile payments company. Among One97’s ambitions: to be the nation’s chat app of choice, a trustworthy bank, the e-commerce go-to, as well as a place to pay bills, buy train & plane tickets, book hotels & flights, and more.
Within fintech specifically, it’s carving out a multi-armed niche. The company has used its dominant position in digital money to move beyond e-payments solutions and money storage. Paytm now provides loans, sells insurance policies, and facilitates gold transactions.
But it won’t stop there. One97 says one day it will be a “full-stack financial services company.”
With its ever-changing goals, we analyzed Paytm’s moves in the financial services space, and how the company’s offerings have evolved and diversified since its launch in 2010.
table of contents
- Paytm launches a payments bank
- Getting started on the app
- A RuPay debit card for all
- Using QR codes
- Hyper-local human ATMs
- Moving beyond a payments bank
- Lending and credit scoring
- Paytm Gold
- Investment and wealth management
- Partnerships, recurring bills, and more
- Rising competition
- Indian government initiatives
- Big tech leverages the UPI
- E-commerce giants run their own semi-closed wallets
- Well-funded local competitors
- Telecommunications companies are a threat
Paytm launches a payments bank
Initially, Paytm launched as an app to refill mobile balances (ie. calling minutes), but the company quickly expanded, using its mobile app as a way to offer financial services to the large unbanked population in India.
In 2013, the company introduced Paytm wallet, which allows users to store money in an e-wallet on their phones. In 2015, its e-wallet was folded into the payments bank service, allowing customers to place more money in the mobile wallet and earn interest on their deposits.
Paytm’s payments bank is “designed to help achieve financial inclusion in [the] country” by targeting the millions of unbanked and underbanked consumers throughout India. Not only are Indian banks notoriously weak, wracked with debt from defaulting loans and large-scale frauds worth billions of dollars, they’re also seen as untrustworthy by local consumers.
Cash continues to be king in the nation’s economy – but with its money transfer services, savings account options, and debit card capabilities, Paytm hopes to step into the void they’ve left behind, streamlining payments processes and enabling more efficient digital transactions. With its tagline, “India’s most sincere bank,” it’s also painting itself as the most trustworthy option for consumers.
As we discuss below, Paytm’s payments bank is characterized by a number of features, from debit cards to QR codes, but it all begins with getting payments bank users verified.