Paytm Business Model

Hello friends, my name is Gauhar Ali .

and we are going to discuss about Paytm business model

Everybody knows about Paytm, you may have done recharge from there

or online order or bill payment.

So how do they do earn? We’ll discuss this today

First of all let’s talk about it’s history

that Paytm is a brand

Which is a part of one 97 communication

Started in 2010

And so far has received funding of 1500 crore

In 3 rounds

and they have acquired 3 companies, we won’t dive deep in the history

They started their business with mobile recharge

You can add money in wallet.

and recharge your phone

And gave a lot of cashback in the beginning

100 cashback on recharge of 500

These cashbacks were a way of making paytm a habit

Now what happens, you normally used to do recharge

You used to get a coupon( it used to have a code)

Then with time, we gave our number to service providers for recharge

But today, most of the people

Who know how to use internet

We prefer paytm

and we can get 5% cashback

10rs, 20rs cashback

And we prefer paytm because of their service and cashback

And today they are earning on the behalf of cashbacks they have given in the initial phase

If we divide their business model

It’s a combination of 7 Business model.

First Business model is market place.

What does it mean?

Their model is a commission based

When a seller list a product on their website

when a particular product is sold, they get a commission

that’s it

There are some hidden cost inside it too

Suppose there’s a product worth 100rs on paytm

So the product sold is of 100rs

and on this product

Seller have to give 2.8% transition tax of the amount paid by the consumer to the paytm

Logistics charges are on paytm

and commission

Basically paytm earns via 3 medium

and if they try to do some fraudulence

Then paytm charges big penalty on them

then they’ll pay for the penalty as well.

According to paytm,

They have daily sale of 20 lakh products

They get transaction fees, commission

and most important thing, 90% of payment is

Prepaid means from the wallet.

So

Whenever a order is prepaid, chances of return request are low

Normally if mode of payment is cash on delivery

then chances of cancelling the order are high

SO the transportation cost

is the loss

So here majority is prepaid

So chances of cancellation are high

their next business is of recharge

Normally shop service provider

used to keep coupons with them

and in return they used to margin 5-6%

Here they are getting orders in bulk

And no inventory cost

No need of paper

They can directly pay from paytm

So from here

Inventory cost is cut

and commission is there

So they do give cashbacks

because they want to make you habitual

A time will come when

You’ll get used to paytm

and their next business model

They are tied up with MTNL

BSNL

and with power supply

with airtel

with broadband

Same game whenever a person recharges from a particular service provider

There, they get a commission

They first give customer some refund

If you pay from paytm, you get 50% off

If a person once paid the electricity bill via paytm.

Chances are high, you’ll pay the bill from then only

Now what people do

If they have 10 sim

They first get discounts from those 10 sims

And change from one wallet to another wallet.

You can do this

But normally

People are getting positive towards paytm

next business is

of Payment gateway

Mean if i am runnig my website

Suppose i am selling my nutrition supplements

and i want to add a payment gateway

So that you can pay via card

SO they provide this solution

called payment gateway

and they get some commission

Now their architecture cost

All the cost in the making of payment gateway

It’s a one time cost

After this

More the payment,, more the commission

So there are many companies

Who are earning only by providing payment gateway

Paytm has only one subsdiary( means their payment gateway is handled by some other company)

Next business model is of bank

Next is

Digital wallet

that you can send/receive money in wallet

Okay

Suppose i added 10k

but those 10k

When i will add them in my account

I have to give some commission

They’ll earn from this too

We do not understand this.

But they do earn from this mode

Now the new thing

Gold currency

that you can buy gold in 10rs

20rs gold

Everyone know about this business

Your money will be used

If prices of gold increase, you’ll get the increase

and they’ll cut their commission

and if prices of gold declines, still they take commission

So basically

They are earning a alot just via commission

If you appreciate my articles then please share this.

Be curious

Be happy 😉

Paytm Business Model

Hello friends, my name is Gauhar Ali .

and we are going to discuss about Business model of Paytm

Everybody knows about Paytm, you may have done recharge from there

or online order or bill payment.

So how do they do earn? We’ll discuss this today

First of all let’s talk about it’s history

that Paytm is a brand

Which is a part of one 97 communication

Started in 2010

And so far has received funding of 1500 crore

In 3 rounds

and they have acquired 3 companies, we won’t dive deep in the history

They started their business with mobile recharge

You can add money in wallet.

and recharge your phone

And gave a lot of cashback in the beginning

100 cashback on recharge of 500

These cashbacks were a way of making paytm a habit

Now what happens, you normally used to do recharge

You used to get a coupon( it used to have a code)

Then with time, we gave our number to service providers for recharge

But today, most of the people

Who know how to use internet

We prefer paytm

and we can get 5% cashback

10rs, 20rs cashback

And we prefer paytm because of their service and cashback

And today they are earning on the behalf of cashbacks they have given in the initial phase

If we divide their business model

It’s a combination of 7 Business model.

First Business model is market place.

What does it mean?

Their model is a commission based

When a seller list a product on their website

when a particular product is sold, they get a commission

that’s it

There are some hidden cost inside it too

Suppose there’s a product worth 100rs on paytm

So the product sold is of 100rs

and on this product

Seller have to give 2.8% transition tax of the amount paid by the consumer to the paytm

Logistics charges are on paytm

and commission

Basically paytm earns via 3 medium

and if they try to do some fraudulence

Then paytm charges big penalty on them

then they’ll pay for the penalty as well.

According to paytm,

They have daily sale of 20 lakh products

They get transaction fees, commission

and most important thing, 90% of payment is

Prepaid means from the wallet.

So

Whenever a order is prepaid, chances of return request are low

Normally if mode of payment is cash on delivery

then chances of cancelling the order are high

SO the transportation cost

is the loss

So here majority is prepaid

So chances of cancellation are high

their next business is of recharge

Normally shop service provider

used to keep coupons with them

and in return they used to margin 5-6%

Here they are getting orders in bulk

And no inventory cost

No need of paper

They can directly pay from paytm

So from here

Inventory cost is cut

and commission is there

So they do give cashbacks

because they want to make you habitual

A time will come when

You’ll get used to paytm

and their next business model

They are tied up with MTNL

BSNL

and with power supply

with airtel

with broadband

Same game whenever a person recharges from a particular service provider

There, they get a commission

They first give customer some refund

If you pay from paytm, you get 50% off

If a person once paid the electricity bill via paytm.

Chances are high, you’ll pay the bill from then only

Now what people do

If they have 10 sim

They first get discounts from those 10 sims

And change from one wallet to another wallet.

You can do this

But normally

People are getting positive towards paytm

next business is

of Payment gateway

Mean if i am runnig my website

Suppose i am selling my nutrition supplements

and i want to add a payment gateway

So that you can pay via card

SO they provide this solution

called payment gateway

and they get some commission

Now their architecture cost

All the cost in the making of payment gateway

It’s a one time cost

After this

More the payment,, more the commission

So there are many companies

Who are earning only by providing payment gateway

Paytm has only one subsdiary( means their payment gateway is handled by some other company)

Next business model is of bank

Next is

Digital wallet

that you can send/receive money in wallet

Okay

Suppose i added 10k

but those 10k

When i will add them in my account

I have to give some commission

They’ll earn from this too

We do not understand this.

But they do earn from this mode

Now the new thing

Gold currency

that you can buy gold in 10rs

20rs gold

Everyone know about this business

Your money will be used

If prices of gold increase, you’ll get the increase

and they’ll cut their commission

and if prices of gold declines, still they take commission

So basically

They are earning a alot just via commission.

i forgot to mention that paytm also jumped into ecommerce field  so they are genereating their revenue from paytmmall , its just like anyother ecommerce website 

If you appreciate my articles then please share this.

Be curious

Be happy 😉