Watch: Why does Paytm's Vijay Shekhar Sharma feel Indian market is different Indian market is different from its western counterpart. It's not a 'winner takes all' situation here, feels the founder, CEO of Paytm as he speaks with Surabhi Agarwal and Raghu Krishnan.

Watch: Paytm's Vijay Shekhar Sharma on RBI's mandate on data localisation Paytm's founder, CEO tells Surabhi Agarwal and Raghu Krishnan how he feels about RBI's mandate on data localisation and e-commerce policy.

Financial services are going to become the next big bet for mobile payments company Paytm , which plans to invest about Rs 5,000 crore in its core business this year. The company is also aiming to double the number of quarterly transactions from 1 billion per quarter earlier this year to 2 billion per quarter by end of the year.In financial services, it will look to bring new products to the market. Founder Vijay Shekhar Sharma said that while there was an initial impact of RBI’s KYC requirement with 10-15% fall in transactions in early March, the company recovered the numbers in March and grew again in April.In an interview with ET’s Madhav Chanchani, Sharma talked about the potential threat of WhatsApp Payments, comparing it to predictions of fall of iPhone and Apple . Excerpts:We will invest more money in financial services this year as customer lifecycle is getting to the next level of maturity. It’s a logical extension as we worked on commerce last year like travel and ticketing, where we are just a few notches below market leaders.Our obligation will always remain to increase the market size in any category that we go to and not take away market share , as we have shown in payments. New type of loans, newer types of insurance and a new way of doing wealth management: it will take time to build final products since it is a regulated environment where licences will be key.These are early build-ups, so they will take a lot more money than other categories. This year, we are looking at more than Rs 5,000 crore of investment, including payments and financial services. The majority will be in financial services.We have partnered with ICICI Bank to launch post-paid services and we will partner with a few others as well. Consumers get a pay-later facility. The most critical thing we have to build into this is how do we collect back the money, which is the trick of the business, while giving loans is easy. That is why we have gone slow and are working with banks.We believe if a product gets traction, we will make money from it. Internet businesses are built on the core philosophy that if you get traction — larger number of customers — revenue is inevitably going to be made. If we work with banks and have them disburse large amounts of capital, they will make money and share it for sure. Internet businesses are valued on traction, and not on profitability. That is something people misunderstand. Profit is a byproduct of traction, which is the truest test of a company.Customers have all the choices on our platform for payments, including cards and net banking. What got impacted for some time were wallet-to-wallet P2P transactions which also came back. UPI also chipped in. So, March was a flat month, but we are up again in April. We were also pleasantly surprised with KYC take off. One of the lucky things for us is that we started our KYC operations one year ago.We were building our model with financial services in mint much before the KYC obligation came on. It becomes onerous on an entity which is just in the payments business. Now the wallets are being issued by Paytm Payments Bank. So, it is now part of a larger cost structure and not just a payments cost structure as we have a bigger business model.At one point in time, it was said that BHIM will be the killer, then it was said Phonepe will be the killer and then Google Tez came. The problem is that WhatsApp Payments has not even arrived yet, so we cannot even counter their numbers. It is like predictions saying that new iPhone model is a failure and Apple is doomed. The naysayers are obligated to say this and they should not matter. As of today, we do three categories of P2P business — Paytm Bank, Paytm Wallet and Third Party Networks, which are banks.Remember we are huge on-us (transactions happening between Paytm users) company. These new players are not banks and they are not inheritors of their own switches. They will obligatorily use third party parties. Why is Paytm KYC happening on such a scale? Because P2P transactions require KYC.We are not part of the market share race for switches, but how many consumers are using us to do everyday transactions. The number of transactions that they do on Paytm every year increased from 18 in Jan 2017 to 34 in Jan 2018 for our monthly active users.