Paytm is a popular digital payment platform based in India. It was founded in 2010 by Vijay Shekhar Sharma and is currently owned by the company One97 Communications. It provides a range of financial services, including mobile payments, digital wallets, online shopping, bill payments, and ticket bookings. Using the Paytm app or website, users can link their bank accounts or credit cards to make quick and secure transactions. Paytm Wallet allows users to store money digitally and use it for various transactions, such as paying bills, recharging mobile phones, or purchasing goods and services from partnered merchants.
Paytm’s history dates back to its founding in 2010 by Vijay Shekhar Sharma. Here’s a timeline highlighting the key milestones in Paytm’s journey:
2010: It was launched as a mobile recharge and bill payment platform, initially focusing on providing a convenient way for users to recharge their mobile phones and pay utility bills.
2014: They expanded its services by introducing the Paytm Wallet, allowing users to store money digitally and make quick payments for various transactions.
2015: Alibaba Group’s financial affiliate, Ant Financial, invested in One97 Communications, the parent company of Paytm, becoming a major stakeholder in the company.
2016: In November, the Indian government announced the demonetization of high-value currency notes, leading to a surge in digital payments in the country. They capitalized on this opportunity and experienced significant growth during this period.
2017: Paytm launched Paytm Payments Bank, which operated as a separate entity under the umbrella of One97 Communications. Paytm Payments Bank offered savings accounts, debit cards, and other banking services.
2018: Paytm expanded its services further, including online ticket booking (movies, flights, trains, etc.), online shopping, and a merchant payment ecosystem. It also introduced Paytm Money, a platform for investments in mutual funds.
2020: Paytm faced temporary removal from the Google Play Store due to policy violations related to in-app gambling activities. However, it was reinstated after making the necessary changes to comply with the store’s policies.
2021: Paytm filed for an initial public offering (IPO) to list on the Indian stock exchanges, aiming to raise funds for business expansion and growth.
Funding And Shareholding
As per the cutoff in September 2021, the funding and shareholding structure of Paytm, the parent company One97 Communications, and its subsidiaries were as follows:
- One97 Communications Limited: One97 Communications is the parent company of Paytm. It has received funding from various investors over the years, including:
- Alibaba Group: Alibaba’s financial affiliate, Ant Financial (now known as Ant Group), initially invested in One97 Communications in 2015 and became a major stakeholder.
- SoftBank Vision Fund: SoftBank’s Vision Fund invested a significant amount in One97 Communications in 2017, making it one of the largest shareholders.
- Berkshire Hathaway: In 2018, Warren Buffett’s Berkshire Hathaway invested in One97 Communications, marking its entry into the Indian market.
- Other Investors: One97 Communications has also received funding from other investors, including venture capital firms and institutional investors.
- Paytm Payments Bank Limited: Paytm Payments Bank is a subsidiary of One97 Communications and operates as a separate entity. As of my knowledge cutoff, the major shareholders in Paytm Payments Bank were:
- One97 Communications Limited: Being the parent company, One97 Communications holds a significant stake in Paytm Payments Bank.
- Vijay Shekhar Sharma: Vijay Shekhar Sharma, the founder of Paytm, also holds a stake in Paytm Payments Bank.
Post-IPO shareholding (as of June 2022):
|Vijay Shekhar Sharma||8.92%|
|SVF India Holdings (Cayman) Ltd||17.46%|
|Saif lii Mauritius Company Ltd||10.59%|
|Axis Trustee Services Ltd||4.77%|
|Saif Partners India lv Ltd||4.5%|
|Bh International Holdings||2.41%|
|Canada Pension Plan Investment Board||1.71%|
Paytm has made efforts to expand internationally and explore new markets beyond India. Here are some notable international expansion initiatives by Paytm:
- Canada: In 2014, they launched its mobile wallet services in Canada, allowing Canadian users to make mobile recharges, bill payments, and peer-to-peer money transfers.
- Japan: In 2018, They made its entry into the Japanese market through a joint venture with SoftBank and Yahoo Japan Corporation. The joint venture, known as PayPay Corporation, launched a mobile payment service called PayPay, which gained significant traction in Japan.
- United Arab Emirates (UAE): In early 2019, It launched its digital wallet services in the UAE, enabling users to make mobile recharges, bill payments, and merchant payments within the country.
- Europe: It has expressed interest in expanding its operations to European countries. In 2019, Paytm’s CEO, Vijay Shekhar Sharma, mentioned the company’s plans to enter the Czech Republic, Slovakia, and Romania markets.
Controversies Of Paytm
Paytm has faced a few controversies and scrutiny over the years. Here are some notable controversies associated with Paytm:
- Data Privacy Concerns: In 2018, there were reports alleging that Paytm was sharing user data with third-party companies without explicit consent. Paytm denied these claims and stated that they only shared data with necessary parties for providing services and maintaining security.
- KYC (Know Your Customer) Compliance: In 2018, Paytm faced scrutiny from the Reserve Bank of India (RBI) regarding its compliance with KYC norms. The RBI temporarily halted the onboarding of new customers to Paytm’s Payments Bank due to non-compliance issues. Paytm subsequently took steps to address the concerns and resumed customer onboarding.
- Fake Paytm Apps: Paytm has dealt with instances where fraudulent mobile apps with similar names were created to deceive users. These fake apps were designed to collect personal information and carry out fraudulent transactions. Paytm has consistently issued warnings to users and taken legal action against such fraudulent apps.
- Paytm and Gambling: Paytm has faced temporary removal from the Google Play Store in 2020 due to policy violations related to in-app gambling activities. Google’s policy prohibits real-money gambling apps on the Play Store in India. Paytm made necessary modifications to comply with the policies and was subsequently reinstated.