When you have more than 300+ million users, making changes to your app is challenging.
For Paytm, which recently rolled out some foundational changes to its product, the impetus came from the quantum jump in digital payments and the explosion in the number of use cases over the last 18 months. According to the Reserve Bank of India (RBI), India’s total digital transaction volume has grown from ₹3,412 crores in 2019-20 to ₹4,371 crores in 2020-21.
“Our users are now demanding much more from payments than the traditional construct of scan and pay. From peer-to-peer payments to automatic payments to payments from different instruments, we are now providing them with more flexibility and depth.”Shreyas Srinivasan, Product Lead, Paytm
Paytm has three main pillars in its business, although payments – a space that it pioneered – continues to be its mainstay. These are:
- Financial services
The new product design integrates data flows across all three pillars, underlining Paytm’s ambitions of creating a super-app where users can transact seamlessly across their financial lives.
What does the new Paytm app offer?
1. Pay from multiple sources of wealth
Paytm enables users to make payments using multiple instruments on the platform, going beyond a single bank account linked to a UPI ID. The team says that one such payment instrument rapidly gaining traction is the app’s ‘Buy Now Pay Later’ feature called Paytm Postpaid.
Along with the standard payment methods like Credit/Debit Card and Wallet, users can also make payments using their Fixed Deposits (FD) held with Paytm Bank without breaking the FD. This allows users to make payments while continuing to earn higher interest on their funds. Here, Paytm’s Payments Bank license gives it a unique advantage in the ecosystem.
2. Sub-wallets for different payment categories
Under the main Paytm wallet, there are specific sub-wallets like food, transport, etc.
So, for instance, if a user scans the QR code from a food merchant, the app detects the merchant and pays from the food wallet. There is also a business use-case here, where corporations are topping up employee food wallets, much as they use coupons like Sodexo.
3. Capture payment context via chat
Every payment carries context, and Paytm’s research showed that users want to maintain records of the ‘how, what, when’ of each transaction.
While most payment apps allow users to chat with a payee already on their platform, Paytm has gone further to offer richer chat functionality as an easy way of maintaining context and payment history. This includes payees who may not be on the platform. So, for example, after making a payment to someone not yet on Paytm, you can use the chat to keep notes for yourself about the payment, including adding photos like bills.
Another feature that will be released shortly is splitting a payment amongst members of a group chat.
4. Easier for First-Time Users
Paytm’s research showed that most first-time users downloaded the app to receive money. To make it easier for them to complete their first transaction, users can now access their Paytm QR code from the side drawer. They can also share the QR code with their customised badge on Whatsapp to receive payment.
5. Manage business payments from Paytm
While Paytm has a separate merchant app, they have responded to the growing demand for a single app for personal and business transactions by offering functionality for merchants within the consumer app. Besides making and collecting payments, merchants can also see data about their payments history and customers.
Addressing the Trust Deficit
Beyond convenience, the Paytm team says that this new product vision, with its interconnected services and common identity data flowing seamlessly across different components, will help create a layer of trust and transparency in financial interactions.
How big of a moat is this? Will the other players in the ecosystem quickly add similar features?
Srinivasan points to cases like FastTag (the electronic toll payment collection), where Paytm remains the leader, despite banks like ICICI doubling down on this space. Paytm is also an issuer for the National Common Mobility Card – an interoperable transport card by the Government of India – expected to be released soon. He says “To improve the payment experience, you have to be able to improve the user experience on both the user and on the merchant side. Our direct access to a banking layer allows us to improve all transactions’ speed and success rates. So whether it’s paying a merchant, adding balance to FastTag or automatic payments, we have the best success rates and speed.”