Paytm is revolutionising India's payment environment, and creating massive opportunities for banks, insurers and asset managers during the process. Adoption rates have been amazing — even by today's standards. The company was founded less than a decade ago. Yet, today, more than 7 million merchants across India use its QR code-based mobile payment system. The app has been downloaded more than 100 million times; the number of registered users has jumped from just 11 million in 2014 to more than 420 million today. Revenues soared to US$480 million in 2018. 

Paytm's core business has always revolved around payments. But the company sees itself more as a 'problem solver' than a bank or a tech firm. The company's next objective was much more ambitious — to make India's payment system more inclusive, more efficient and more reliable. It was an audacious goal. When the company was founded, the vast majority of India's population had no access to formal banking services at all. Those that did have bank accounts often struggled to use the instruments available to them. Less than 2 percent of the population had a credit account. Cash and cheques were the norm. Over the next few years, Paytm added dozens of new use cases for its technology. Paytm's mobile payment platform was, for a time, the only payment method accepted by Uber in India. It partnered with a wide range of transport, utility and entertainment companies to create digital payment systems. And it launched an e-marketplace where customers can find almost any item or service available in India, often at a discounted rate.

Users of Paytm's app have access to a stunning array of goods and services. At last count, the platform boasted more than 15 million merchants across more than 200 different categories of service. Many of those categories involve what is traditionally seen as financial services. For example, Paytm offers customers the ability to insure a wide range of purchases — including bus trips and movie reservations. It has a 'fractionalized asset ownership' product that allows customers to pay as little as 1 rupee for a fraction of a stock or asset. Its Paytm Gold Savings provides customers with a long-term savings vehicle.

In a cash economy, small businesses and merchants are often overlooked by the traditional banks due to a lack of reliable records and credit history. Paytm helps to solve that pain point by using its technology to create a robust and reliable view of its business users — their cash flows, their customers, their daily balance sheet status and so on. And they use that view to help the business establish their credit-worthiness.

Reason for losses:

The Company has incurred huge capital expenditure in creating a brand and establishing its business activity. We have incurred a considerable amount in various capital & operational expenditures which resulted in losses during the financial year.

Steps taken or proposed to be taken for improvement:

The Company is focusing on strengthening its position in various business segments like Payments Bank, Insurance and Insurance Broking, travel ticketing, hotel, mobile wallet services, etc. and that would result into a better turnover in coming fiscal years, and will also have an impact on the Paytm share price.

Expected Increase in productivity and profits in measurable terms:

The business and consumer confidence is expected to improve in the coming years, geared with a streamlined organizational design, the company intends to grow its businesses. The improvement in consumer sentiment and increased consumer spending through online platforms will enable the growth momentum to pick up.

The management continues to be cautiously optimistic towards the external economic environment and expects consumer demand to become more consistent and robust in the ensuing fiscal years. Further, various policy decisions taken would act as a growth channel for the Company which would contribute to increased revenues and higher margins. Further, a number of initiatives for productivity and profitability, increased investments in technology, customer engagements, loyalty programs, and improving the customer experience, have shown encouraging results.