FinTech View from the Field

1. FinTech
Kamal Gelya

2. Source:Let’sTalkPayments
IndiaFinTechLandscape

3. Problem: Financial Inclusion
• Population: 1.3 billion
– 60% Unbanked
– 90% Small businesses no link to formal financial institutions
– Only 3.6% households undertake cashless transactions
– 600M with net-banking facilities
– 20M credit cards, 350M debit cards
– Underbanked : rising incomes, limited access to traditional
financial services
– 60% own mobile phones
– 60% projected to own smartphones by 2019
– In 2015, 34.1% of mobile phone users accessed the internet
from their mobile phone. This figure is expected to grow to 47.4
percent in 2019.
* Sources: Statista and Economic Times/India Development Fund

4. “A secure digital wallet that lets you manage your money;
recharge, pay bills, shop on Paytm, send money to friends
& pay for various brands & services like Uber, MakeMyTrip,
BookMyShow and many more.”
Paytm wallet. What’s that?

5. Paytm wallet
• First mobile wallet provider to also run a
mobile marketplace
• 95 out of 100 wallets are Paytm
• 120M registered users as of Feb’16
– India has about 135 million wallet users
(6Wresearch)
• 2.5M transactions per day, on average
• 150,000 merchants on board
• Monthly limit set by RBI
– Rs. 10,000 w/o KYC , Rs. 1 Lakh with KYC

6. Paytm
• 2010: Incubated by One97
Communications as a prepaid
mobile recharge website
• 2013: Immediate Payment
Services (IMPS) using Mobile
number and Mobile Money
Identified (MMID)
• 2014 : Mobile marketplace
• 2015 : Offline Payments,
Paytm Marketplace $1B Gross
Merchandise Value (GMV)
• 2016 : Payments Bank

7. Board of Directors
• Vijay Shekar Sharma, Founder & CEO
• Ravi Adusumalli, SAIF Partners
• Vivek Mathur, SAIF Partners
• Jing Xiandong. COO, Ant Financial Services Group
• Peng Yijie, President, Alipay International
• Ruchi Sanghvi, Investor and Adviser
• Naveen Tewari, Founder, InMobi
• Neeraj Arora, Global Business Head, WhatsApp Inc.
• Ratan Tata, Chairman of Tata Sons
• Jai Das, Managing Director, Sapphire Ventures

8. Investors
• Alibaba Group owns 40% stake in Paytm
($680M)
• Silicon Valley Bank
• SAIF Partners, Hong Kong based PE firm
• Sapphire Ventures, an expansion-stage VC firm
• Ratan Tata, Tata Group

9. Network Externalities
• First mover advantage
• Difference between the payment gateway
business and the mobile wallet business is
that the mobile wallet provider owns the
customer.
• More wallet customers  merchants are
keen to partner with the wallet provider.
• Network effect as technology moat
• Winner takes all ?

10. The ‘Tech’ in FinTech
• Leapfrog to mobile wallets
• Transfer money online or deposit cash to Paytm Wallet
- Use “Pay-in-slip”, Paytm reference (mobile) number
- Virtual account number (PAYTM+Mobile number) and IFSC Code with amount
• Top up Paytm Wallet from an ATM
• Cash on delivery (Flipkart)  Payment on delivery (Paytm)
• Scan and pay using QR-code
– No data connection needed, merchant gets SMS confirmation
• Paytm wallet for Uber and Pizza
– RBI mandates two-factor authentication for ‘Card-not-present’ transactions
• Bug Bounty
– Independent security groups or individual researches report potential security flaw
• Paytm ‘Payments bank’
– RBI approves a new type of bank
– Accept deposits and offer payment services
– Customer savings account up to Rs. 1 Lakh
– Service SMBs, migrated labor and low income households
– No lending activities
– To be located in rural ‘unbanked’ areas
– Deposits can be invested in government bonds

11. Partnerships
• The Mobile Store, 2-hour express delivery of smartphones
• Uber
• Indian Oil, pay at the pump with Paytm
• Makemytrip
• Bookmyshow
• IRCTC, Metro card
• Quick Service Restaurants (QSRs)
• FoodPanda
• Paytm – ICICI virtual prepaid cards
• Tie up with Insurance companies
• Tie up with LendingKart to provide collateral free business loans to
SMEs and merchants

12. Competition
• Snapdeal /Freecharge
• Flipkart Money
• Amazon
• MobiKwik
• RechargeItNow
• PayU Money
• Oxigen Wallet

13. Business Model
• Revenue
– Mobile, DTH and Data card recharge
– Bill payments
– Ticketing
– M/E-commerce marketplace, merchant subscription fees
– Payment gateway, telco commissions 2-5%
– Paytm deals and coupons, customer fees
– Wallet to Bank transfer, customer fees
• Solution
– Bargain power
– Unified dashboard
– Catalog & Inventory Management
– Promotions

14. Paytm Roadmap
• Zero transaction fee for Consumer-to-merchant offline wallet
transactions as of Feb’16
– Fee: 0.5% to 1.75%, depending on merchant service provider
• Reserve Bank of India (RBI) approved ‘Payments bank’ (for 18-
month ‘provisional period’)
• Slide and Share
• Transaction  Chat, text and remind friend
• View transactions  Personal Finance Management
• ‘Sound pay’ feature
• Facial recognition technology (‘Smile to Pay) to secure mobile
transactions
• Hyperlocal (Grocery) delivery in Bangalore
• iPhone market share in India is just 2%  Apple Pay is not a
contender.

15. References
• TNW http://thenextweb.com/in/2011/11/02/paytms-web-and-mobile-apps-offer-painless-online-recharging-in-india/
• CrunchBase https://www.crunchbase.com/organization/paytm/timeline#/timeline/index
• Economic Times http://economictimes.indiatimes.com/small-biz/startups/paytm-scraps-transaction-fee-for-offline-
merchants/articleshow/51017672.cms
• IBS intelligence https://ibsintelligence.com/ibs-journal/ibs-news/paytm-trialling-soundwave-technology-for-in-store-payments/
• TNW http://thenextweb.com/in/2011/11/02/paytms-web-and-mobile-apps-offer-painless-online-recharging-in-india/
• ET Telecom http://telecom.economictimes.indiatimes.com/news/mvas-apps/why-digital-payment-businesses-like-payu-
mobikwik-paytm-others-set-to-boom/47046963
• DSIM http://dsim.in/blog/case-study-paytm-journey-from-mobile-recharge-to-e-commerce-market/
• YourStory http://yourstory.com/2014/11/uber-paytm-wallet/
• DNAIndia http://www.dnaindia.com/money/report-all-you-need-to-know-about-payments-banks-2116207
• DailyFinTech http://dailyfintech.com/2015/05/05/paytm-is-finally-turning-the-mobile-wallet-dream-into-reality-in-india/
• FinancialExpress http://www.financialexpress.com/article/industry/companies/paytm-partners-ccd-dominos-for-offline-
payment/69001/
• Paytm Blogs https://paytm.com/blog/immediate-mobile-payment-service-imps-a-new-payment-instrument-on-paytm/
• Paytm Seller https://seller.paytm.com/login
• Techcrunch http://techcrunch.com/2015/03/13/indias-top-mobile-wallet-app-adds-support-for-payments-to-bank-accounts/

16. THANK YOU!
#fintech2016