Demonetisation led to a phenomenal spike in the adoption of mobile wallets like Paytm. Its founder talks to The Hindu.

Due to a cash crunch following the government’s move to demonetise Rs.500 and Rs.1,000 currency notes, mobile wallets like Paytm have seen a phenomenal spike in adoption. Vijay Shekhar Sharma, the founder of Paytm talks to The Hindu about the use of Prime Minister’s photo for their advertisement, the company’s upcoming payment banks and enhancing application security.

Paytm has seen a big uptick in usage due to demonetisation. How has the offline usage risen?

Offline has become huge for us. Almost 65 per cent transactions are now offline for us. We have added nearly a million QR codes at point of sale during the past month. We have issued about three million such point of sales in total. As far as digital payments go, offline shops in India are so deprived… it is a big opportunity and that is why we continue to expand.

We are signing up new merchants aggressively. We signed thousands of petrol pumps in last few days. We are targeting that every petrol pump in the country gets this option and for every gas cylinder distribution too there is an option to pay digitally.

I believe the push and attention that demonetisation is giving to digital payments, no amount of marketing and offers such as discounts and cash backs could have done this.

How much did you spend on marketing in November?

Last month, we spent around Rs.250 crore. On a yearly basis, we have a marketing budget of around Rs.600 crore, which comes down to about Rs.50 crore a month.

Did Paytm have the approval from Prime Minister’s Office for using the picture of Prime Minister Narendra Modi in advertisements?

As Paytm, we sort of applauded our PM for an act which will benefit all fintech start-ups. While this is a great opportunity from the perspective of black money and so on, I believe that the PM has kicked off the golden age for fintech companies. That is what we did. We got to work as soon as the announcement was made, printing of newspapers got delayed...We managed to get ad only in three papers.

So would you say all the approvals were in place when you printed the ad?

We talked about it… All I can say is we did talk about it with the necessary authorities that we are doing it tomorrow.

What about the uptake in rural areas, where there are no smartphones?

One of the most important learning for us from demonetisation was the need for technology for people without smartphones or Internet. Everybody knows how to make a call. We have introduced a toll-free number 180018001234, which users can call to transfer money. They simply need to dial the toll-free number from registered mobile, enter the recipient’s mobile number, amount and their Paytm PIN…transferring money is as easy as making a call.

Paytm doesn’t require a passcode right now, so if one loses his/her phone, Paytm account could be misused. Also, a lot of app permissions that Paytm asks for are not listed on the app permissions page on your website.

We have just added a passcode feature. So, now people will be to use any of the passwords that they have for smartphones — be it a pattern, fingerprint or a password, before they make a payment. If your device goes into someone else’s hand they won’t be able to misuse it. The application will use the same password as for the Android device so users don’t need to remember an additional password.

The permissions we take and why we take them, are listed explicitly. We will make sure that a permission which is not explained on the webpage, is removed.

What is the logic behind the integration of wallets and Payments Bank?

When we had applied for a payments bank license we had consented to the RBI that we will keep both under the same entity, which is the Paytm Payments Bank. That is why wallets are moving to payment bank…. We just can’t wait to start, so we have begun with informing the consumers about the integration through a notice. The notice also added that the way people use their wallets will not change but wallets will now be issued not One97 Communication Ltd but by Paytm Payments Bank Ltd.

Who all are the investors in Paytm Payments Bank?

Paytm bank will have two investors – me and One97 Communications. This is more Indian than any other financial services company in the country. I have sold my shares in Paytm so that I can fund independently and I have done Rs. 112 crore right now. So, we have capitalised about Rs 200 crore now and plan to do Rs 400 crore. So, we will put more money in the company.

When can we expect the bank to roll? Any tentative timeline?

Payments Bank is in its final leg. We are going through different pre-launch processes. Once license comes, there will be a few more things to do. We have also built a few product partnerships related to financial services such as wealth management and investment products, but they also need to be approved.

March is the deadline for the bank, anyways. So, we have to launch it in the first quarter of 2017.

What about the network of business correspondents?

We already have 60,000 Paytm partners, out of which we will build a business correspondents network. Earlier, we had a plan of limited roll-out. But with demonetisation creating a brand recall for us and services now reaching every nook and corner, we will be building the BC network aggressively.