It is a big day because you have launched this smartphone-based NFC (near field communications) payment for merchants in collaboration with Visa. Explain it.
Today is a big day because our ambition of empowering small merchants was taken toady. We are able to convert an android smartphone into a card taking POS device. with our software. We launched that software today. We also launched our very popular ultra uber Soundbox Version 2.0. This is the product which when you go to the shops and when you are paying, makes a sound that payment has been received by the shopkeeper. We have launched version 2.0. You can not only listen to the voice, you can also see the payment amount on the screen and when the day is ending, the total number of payments received can be seen.
Both these products are very important for us to target a large number of merchants in this country. We have set aside 50 million merchants to have payment acceptance in the next few years using Paytm software and services.
It is pretty clear that there is a big fight for onboarding merchants and to get their business. It is also very clear that it cannot be done with just Hindi or English. Have you figured that out at Paytm and what are your plans?
One of the most important things that we figured out is that the massification of technology is possible only when you add it into a local language, when you speak the language of the masses in a language which is local and colloquial. We are there in 12 languages. Soundbox has demands in many more languages and that is what we have added including the smart phone app that we are talking about which can take card payments in 12 languages. The opportunity here is to use local languages and expand the payment network. That is the tone and method that we are going ahead with.
At a press conference you said the future is bright, the future is blue. But when you allow merchants and all of us to use our phones as a payment mode and a payment system, how is it different from what is already out there? Why can’t the QR be used just for that purpose?
Some merchants need mobile payment in small amounts like Rs 10, Rs 20, Rs 100, Rs 50 to Rs 1,000 or a couple of thousand rupees. It is typically paid by using the mobile phone linked to a bank account or creating a wallet. Paytm is leading that space with 1.2 billion payments last month alone.
There is another segment of merchants who require payments to be accepted using credit cards and debit cards is also out there are very large merchants. For these merchants, we needed to launch a software and hardware and we launched that in the 2020 beginning. It was a smart POS device that was able to take payments from cards and from mobile phones in one single device. Now converting the smart POS into a software allows you to use any device of your own choice and to convert that into a card machine.
Our ambition is to take 50 million merchants on our platform and that is going to be fulfilled.
How many merchants has Paytm already onboarded? Are they from any particular geography?
Well we today have 20 million merchants and incidentally Paytm’s merchant base is centred around large cities because large cities like Delhi NCR, Mumbai and Bangalore. We are in 250 cities and in 19,000 pin codes. We will expand to the next level of cities and the next level of pin codes.
Is this a winner takes all market? Amazon is trying to make waves here. There is Reliance Jio. Pine Labs is trying to do it also.
This is not a winner-take-all market because India’s merchant base is so diverse and huge that there will be multiple players. I do not think more than 30-40% can come to one merchant. It is a pretty diverse market and this is good for industry, and it is good for the country as more players mean more innovations.
You just said how Paytm is numero uno paytm with 1.2 billion transactions. PhonePe is also saying they are number one. So who is actually number one?
We do not bother about that. We were talking about our numbers. If there is somebody with a larger number, they will be number one. We do not care who is number one. We care that more number of customers love Paytm and pay using Paytm, more number of merchants love Paytm and accept payment using Paytm. That matters to us. The ultimate leaderboard table will be of the revenues and value that you bring to your customers and merchants. That is the leaderboard where we want to be number one.
Something else that Paytm has been doing of late and it has become mandatory also is FASTag. How has that been?
I can say the FASTag has seen a phenomenal use of the Paytm wallet. In other apps or banks, one has to create a separate wallet only for FASTag, but in case of Paytm, the same wallet can be used for everything.
We have also added one extra feature. The FASTag can get a charge from other tolls that you have passed or not passed. Paytm has created an AI based system where it identifies that this payment is not happening and we protect the consumer from the charge requests from so many tolls.
These two features have given us literally millions of customers. It has been an ultra successful product. Actually, FASTag generated more interest in the wallet and the number of transactions have increased on the wallet.
How much better is your wallet business doing?
It would have increased on a month-on-month basis. The customer balances that we see in the wallet has increased dramatically in the last two quarters over the last six months.
You have also entered stock market trading, insurance even micro insurance. Give us a sneak peek of what else to expect?
My belief is that the journey of financial services is very long and small features can become big. For example, we are working on a large number of things in our banking business. The customer is opening a completely digital bank account, ability to make recurring payments, ability to make fixed deposits, on demand deposits with a partner bank in a very seamless manner.
We are looking to expand into general insurance. The government’s 74% mandate in general insurance was a boon to us. Then you can go to lending with partners. Our team has been able to work with many partners over a period. That way, for merchants to consumers, we are able to offer credit.
I would say financial services is a gourmet meal. It is not a fast forward two minute noodle. It takes time to build because there are regulatory approvals and partners we work with and then there are technology, scale. We are building technology and the system bottom up.
I am very happy that in the year 2020 we have been able to make significant progress. I believe that in the next few years, Paytm will become a full stack financial services group and set of services that customers will love, the way they are technologically integrated in their life.
You are saying financial services is not a two-minute instant noodle, it is a gourmet meal. Where are you today? Are you still eating an appetiser, are you on your second course? Are you anywhere close to dessert and the espresso at the end?
My answer would be we have just finished the appetiser and the main course is starting. The main course will include a number of courses so it is a beginning of the main course because now we are becoming from a young company to a company which will earn its own money, find a breakeven, run on its own course and that is the joy and the thrill of building up. Right now we are in the midst of.
IPOs seems to be the buzz word for 2021. Is Paytm planning an IPO this year or next year?
I have publicly said that we will look at IPO planning with a clear timeline once we have reached a near breaking stage or breaking stage. I have publicly announced that in 12-18 months, we should reach near breakeven or breakeven. Once we have reached that, we will look at options and choices of going public. Right now we are working head down, building up revenues.