The founder of Behance, Scott Belsky, in his famous quote says “It isn’t about ideas instead it is about making ideas work” His quote was practically excercised by Vijay Shekar Sharma when he launched PayTm back in the year 2010 with the primary goal to help Indian cellular users do their recharges for their phones and DTH network online. Let’s explain four important aspects of Paytm one by one below.
What is Paytm?
Paytm word is actually a clipped or call it a short form of Pay Through mobile. Paytm has become one of the popular online marketplaces in the Indian B2C retail space. Although, the company started off as an online platform where users of cellphones and DTH networks would avail online recharge services. However, Paytm no more works the way it used to work in its early years of journey. It was the year 2014 when Paytm decided to diversify into consumer goods. It worked for the company as it’s stock price touched skies.
The idea of Paytm struck Vijay’s mind in 2010 when he noticed something positive in the rapid adoption of mobile internet in India. He realized the growing potential of smartphones and internet by Indian users. This observation inspired him to launch a platform called Paytm that would bring convenience to the users while they make their digital payments for recharges, bill payments, etc.
What is Paytm Wallet?
Paytm wallet is nothing more than a digital account. It gets automatically created when you register your account on the Paytm website or use its mobile application. Paytm wallet stores your money and allows you use it for purchases. Your money is 100% safe and secure and RBI considers Paytm wallet as legally accepted form of account.
Paytm wallet account works the way your bank account works. Just the way you use your bank account for deposit and withdraw of money, similarly, a Paytm wallet account allows you store money but in a digital form and later on use it for when you feel the need for buying something or availing a service.
It does happen sometimes when you recharge your phone, it fails either due to the technical glitch or for some other reason. You don’t need to worry about anything as if your accounted was debited for the transaction, it will return back to your Paytm wallet account. That is the level of safety and security provided by a Paytm wallet account. However, you can’t expect same with a bank account unless you take a strong action against the bank.
How does Paytm wallet work?
Every single penny in your Paytm wallet has a real value as you can use it for shopping anything you want on the paytm website or application. You can easily buy anything you desire using your stored money in the Paytm wallet. You can buy products of your choice not just on PayTm but from offline stores as well. All you have to do is to open your Paytm app and scan a QR code. Your money for that particular purchase will get transfered to their account.
Sometimes there is a possibility that you might face an unsuccessful purchase. Your recharge or some other purchases might fail for one or the other reasons. You don’t need to get frustrated as all your deducted money us safe and will be returned back to your Paytm wallet account. This refund process of Paytm is automatic and you don’t need go escalate the issue to the Paytm staff unless it is necessary. You can also transfer money from your Paytm account to your bank account.
How Paytm recharge works?
Paytm recharge works when the company bridges a connection between banks and cellular companies. You will need a bit of technical understanding of how paytm recharge works. In order to understand it thoroughly, you must learn about what each party involved in Paytm recharge do and how they function? Let’s break our explanation and learn about these three important components.
1. Cellular service provider
Companies like Jio, Airtel, BSNL, etc offer us a range of services like data plans, voice call plans, etc for a certain amount of money. What that means is the fact we can call our friends, access internet, watch Youtube, use social media platforms when we maintain sufficient balances. Once our balance exhausts, we need to recharge our cellular accounts provided by cellular companies. There are both prepaid as well as postpaid users of their services. Prepaid users can’t access service once their account quota is exhausted and postpaid users get bills to pay at the end of their monthly use.
2. Banks
Banks empower us by creating us accounts like savings, current etc. They offer us cheque books, debit cards, credit cards, etc to use our account money. All these means gives us a ticket to use our money for shopping online and offline. When users make an online or store purchases, they will be providing card details. It is followed by the arrival of a code like One Time password on your smartphone in order to confirm your purchase.
3. Paytm portal
What Paytm does is the fact it acts as an intermediary or call it a broker between banks and cellular companies. Paytm uses it’s own payment gateway which in turn connects with the payment gateways of banks like SBI, HDFC, etc and cellular companies.
Your recharges takes place once you open Paytm app and your enter the plan price and your number. You get automatically directed towards the Payment gateway interface. You enter your card details, receive OTP from your bank in order to confirm the transaction. The plan amount of deducted from your bank and transferred to cellular service provider that initiates your recharge and you are able to resume your services.
What Paytm gets is the commission like a real estate broker obtains once he help a property seller to sell his property while a buyer buys his property.
How Paytm makes money?
Paytm makes money in several different ways. It’s revenue comes from transaction fees that is imposed on merchants for using it’s payment services like UPI, and wallets. It also charges them for the use of it’s payment gate services.
Paytm also earns from payment bank interests. Despite the fact Paytm doesn’t charge interest users for payment deposits, it does, however, earn while investing their money for buying government securities. Paytm also uses credit services where in it gets a share of interest while lending small loans to the merchants.
Paytm also earns commissions from sales of merchants who are registered sellers of its portal and it also generates advertising revenue while charging brands and companies that promote their products or services on its website and mobile application.
