Comprehensive Business Model Of Paytm – Simplified For You!

Updated on: Sep 23, 2021
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My name is Aditya Shastri and I have written this case study with the help of my students from IIDE's online digital marketing courses in India.

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Paytm is India’s leading financial services company which provides consumers, businesses, and online companies a platform for financial services and digital payment. The business model of PayTM is a must-know for everyone!

Paytm has over 350 million active users is one of the top platforms for digital payment methods and captures a large audience across all economic strata in the nation.

What does Paytm do to attract such a huge audience? What is the secret behind their success and business model? If you are intrigued by this question you have landed at the right place. Here we will have a look at the operations, finances, and business model of Paytm and learn more about the strategies it employed to gain its widespread usage.

Let’s start learning more about the business model of Paytm by learning more about the company.

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About PayTM

PayTM is an Indian Multinational technology E-commerce company that specializes in digital payment and finances. It is a partial abbreviation of “pay through mobile” with online services like mobile bill payments, travel, movies, and event bookings as well. 

It is one of the most leading online payment methods, with its usage surging to new heights during COVID years. Vijay Shekhar Sharma, Founder and CEO of Paytm, has made banking accessible and convenient to people across the country. It was founded in August 2010 in Noida by Vijay Shekhar. In 2017 Paytm became India’s first payment app to exceed 100 million app downloads.

The payment methods supported by Paytm are Paytm wallet, postpaid, payments bank, debit cards, credit cards, net banking, UPI, EMI. As per the statistics of the company, more than 20 million merchants and middlemen across India use their QR code payment system to accept payments directly into their bank account and Paytm wallets. Paytm also uses various advertisements and paid promotional content to generate revenue

Business Model of PayTM

A fintech app, the business model of PayTM is that of a financial facilitator foremostly. In recent years, in a bid to expand its usage and relevance to customers across the nation and tackle the growing popularity of its main competitor, Google Pay, PayTM has pushed to make its mobile app more than just a payment portal but a super app which provides services like instant shopping, vaccination alerts etc.

In order to understand the highly complicated business model of PayTM, we have further directed the topic into more bit size packets of information. Let us begin understanding the business model of PayTM by starting to learn more about their target audiences.

Business Model of PayTM – Target Audience

In September 2019 Paytm held over 50% of the market share in the payment gateway industry. Paytm targets young individuals transacting on food, cabs, and services to families purchasing clothes, furniture, and more. Paytm has taken huge advantage of the pandemic where the majority chose cashless moreover contactless transfer of amount to avoid contact from the outside world.

 Digital payments are used to purchase food, clothing, services, and any possible thing which makes all the consumers potential customers for Paytm. 

Business Model of PayTM – Digital Marketing Strategies

The company’s digital advertising strategy is based on bringing attention and visibility to potential users by sharing their ads on Twitter and Facebook. Paytm has expanded its reach over social/digital networking sites like Facebook, Twitter, Instagram, etc. It uses the tagline “Paytmkaro” to attract an audience and potential users.  

The #Paytmkaro campaign is used to depict that Paytm is the most user-friendly and convenient solution to everyday transactions. This attracted a huge audience and growth in the use of E-wallets. They have also conducted a series of Facebook lives known as the “Paytm merchant connect -training series”  which turned out to be a great online campaign.

Paytm’s Instagram marketing strategy revolves around the following concepts:

  • Being fast and relevant
  • Add branding to memes
  • Staying true to the taglines
  • Making partnerships 
  • Creating trendy content related to current affairs 

Business Model of PayTM – Discounting Strategy

The biggest selling point of Paytm is the use of offers, discounts, and coupon codes which motivates people to make cashless/digital transactions via Paytm. The cashback offers and discounts offered by Paytm wallet as well as reward points and loyalty benefits on stores and brands attract a huge audience. 

Business Model of PayTM – Events Sponsored

 The company invested a lot of time, money, and effort in sponsoring a variety of events, etc. These helped Paytm to get exposure, as Paytm was the official sponsor of India’s cricket team which helped to gain immense publicity and growth

The business model of Paytm revolves around different services which they provide to merchants and customers like Online Shopping, Payment System, Digital Wallets, Mobile Payments along with different such as Paytm Mall, Paytm Payment Banks, Paytm Money, Paytm Smart Retail, and Gamepad.

Business Model of PayTM – Marketing Campaigns

Paytm has conducted various successful campaigns and partnerships with leading brands. These have grabbed a huge audience for Paytm and are a great way to network with potential users.

Collaboration with the soldier mobile game was a perfect campaign for technology-friendly people and game lovers throughout the world. MBA contest conducted for MBA students to produce a video about the use of the Paytm application. These small campaigns and events target potential users of Paytm. Brand awareness is increased.

Now in the section below, let us look at how Paytm generates revenue and money. 

Business Model of PayTM – Revenue Streams

To understand the business model of PayTM revenue streams we need to look at the functions and activities it performs. It doesn’t charge money directly from customers, Paytm has found indirect ways to charge the customers to earn money.

Some of the ways are listed below:

  • Paytm Mall

Paytm was the first-ever company to launch a mobile-only shopping platform for customers. It has allowed sellers to list their products and items on the Paytm portal. 

For this service and platform to merchants and sellers, Paytm charges a small commission from different products. This is known as the listing and convenience fee. Various merchants and resellers sell their products and services via this medium to grab a larger audience.

  • Recharge services

The business model of Paytm has many functions and activities but one of the key functions is the online recharge service to its customers. It provides recharge available for all the telecom service providers and charges a small 2-3% commission on each recharge. The services are efficient and effective which has helped Paytm to expand and grow exponentially. Coupon codes and discounts have attracted the user’s attention towards this service provided by Paytm.

  • Bill payments

In addition to the recharge services, Paytm provides a provision to pay the household bills such as water, rent, electricity, and phone bills. In partnership with a few educational and financial institutes, it receives payments on their behalf as well. This has made payment easier for household services and educational fees making it feasible for users as well as profitable to the company. 

  • Digital Gold

Gold is one of the most popular ways of investment in Indian households. Paytm has grabbed this opportunity and partnered with a gold refiner- MMTC-PAMP. It has launched the section of digital gold which permits the customer to buy, sell and store gold. 

  • Payments Bank

Paytm provides the facility of opening a zero balance digital current and savings account to its customers. It gives a 4% interest on the savings account deposits of a customer and the service of overdraft as well. 

  • Paytm Wallet 

The Paytm wallet allows customers to store their payments in digital form in an escrow account with the partner bank. This deposit gives interest to Paytm like any other bank.

  • OTA bookings

Paytm recently started with an Online Travel Agency Model. In this business model Paytm allows the users to book train, bus, or airline tickets along with hotel booking service. It charges a certain commission on the bookings depending on the type of booking done by the user. 

PayTM in its bid to beat the competition has come up with unique financial services and is, with all intents and purposes, the future of banking. The business model of PayTM is extremely diverse and provides its user a one stop solution to its customer base for all their financial needs.

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With India turning into a digital and cashless economy due to the pandemic and other factors, the business model of Paytm has been successful in making a lead in the financial and economic sector of India. Digital everything is playing a major role in the cashless world with the growth of digital payments and services across the nation.

If such diverse and creative marketing strategies and business models continuously support the Business Model of Paytm, Paytm will grow faster than ever and take over the financial industry. Digital payment methods are the future of the economy.

Digital operations and marketing are the future of big companies. Learn short term digital marketing courses from IIDE:

The business model of Paytm is a guide to other Indian startups for the success of their company.

How inspiring do you consider the business model of Paytm? Which is your favourite business strategy used by Paytm? How can Paytm improve its business model for its development and growth? 

What are the key features of the Paytm business that you think is the most effective and efficient in widening the customer base of the company? – Share your views with us in the comment section below.

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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]


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