Paytm is a free app – we transfer money, pay bills, and use it at the kirana stores. Then how did it make 1,800 Crores in the last 3 months?
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There are 8 sources through which Paytm is making money
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From the kirana stores/businesses:
1) Paytm Soundbox: There are 60 lakh small/medium businesses which use Paytm soundbox. And they need to pay a monthly rent – 125 Rs (You do the math:))
2) By lending loans to businesses: Kirana store owners & other small businesses can take a loan from Paytm. The interest rates on these loans are between 12-16%. They charge higher interest rates because of the convenience & quick disbursals.
– In the last quarter, they gave 1,800 crore as loans to merchants.
– You do the math w.r.t. the revenue.
3) Commissions: When we pay bills through our Paytm wallets, kirana store owners pay a commission to Paytm. The commissions is a tricky business and the total amount of commissions depend on the type of transaction.
4) Then they charge the ecommerce companies like FlipKart, Amazon for providing their payment gateway services.
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From the individual customer transactions:
5) Paytm Postpaid: If & when you utilize paytm postpaid, there is a convenience charge of 1% and a late fee (upto 750 Rs) if you don’t pay bills on time.
– In the last quarter, they gave 5,000 crore as postpaid loans
– So, a 1% commission + late fee is substantial:)
6) Paytm Personal loans: There is a processing fee on the loan + interest rate.
7) Commissions on the bills we pay – We recharge our phone on Paytm. But, the service providers (Airtel, Jio, etc.) have to pay a commission to Paytm for enabling the transaction.
8) Then, there are ads on the home screen which you & I consume:). So, revenues from the advertisements.
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So, Paytm is not a free app:)