Stepping Up The eCommerce Game: Paytm nails it with eWallets Paytm just had a successful year and their plans for future look even more fruitful.

By Ritu Kochar

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It seems Digital Wallet is the next big thing in the Indian e-commerce industry. And Paytm is revolutionised the concept by bringing it to the masses. What Flipkart did to e-commerce industry, Paytm is doing for digital wallets. It becomes even more significant considering that Paytm is a digital wallet with an e-commerce platform.

Last year was a good year for Paytm. The combined efforts of the whole team – from marketing to technical- proved fruitful when they reached 3.5 million transactions per month, solely offline. The best part about this figure is that 70% of these transactions come from Tier II and Tier III cities. Just these offline transactions are worth $8.5 million, excluding mobile recharges. It estimates that transactions in the offline business will alone grow 10 times to 35 million by the year end.

They say numbers don't lie and for Paytm this truth is nothing but music to ears. Paytm definitely has an edge over all other digital wallets and they are firmly holding on to their 1.4 million users. So what is it that Paytm is doing right? Let's have a look at what strategies they have been using.

Going offline

Paytm took the decision to go offline and it has already worked wonders for them. Nitin Mishra, Products Head, stated how they sold their first offline product in December 2015 and since then there's no loo has been no looking back.

The reason behind this is the fact that in India offline transactions are inversely proportional to the availability of internet. In simple terms, India still lacks in providing Internet to majority of its population. Though efforts are being made to set up free Wi-fi at metro and train stations, still a large number of people stay offline most of the times. Given this, offline transactions provide people with an option to still make cashless payments.

Products head at Paytm, Nitin Misra said that this ensures that loss of connectivity doesn't become a handicap while paying through Paytm. How this works is that the app will regularly save customer details, such as balance in account in the background, and use that information to close the transaction if either or both of the parties experience loss of connectivity. "The moment one party or both come online, the account balance as well as the transaction details will be automatically synced," said Misra. The customer will show the barcode on his phone to the merchant who in return will scan it and the payment will be done. Another method is by generating One Time Passwords. This mode of payment is great for high traffic transit places.

Targeting the hyperlocal

Paytm already have 18,000 merchants on board just for online and now they aim to tap the hyperlocal business by bringing 4 million merchants on board.

Paytm works on two formats –Large Format Retail and Small Format Retails. Where large format retails cover big purchases like toll taxes, paying school fees or even insurance premium, small format retails cover the local paan and "kirana' shops, rickshaw and so on. Not only do they have movie ticketing and gas stations on board, Delhi and Mumbai users can even recharge their metro cards using Paytm.

What's working here for Paytm is that they have established a trustworthy relationship with these offline merchants. With regular cash back options and getting products from their reliable local shops, the consumers stay on board. Shopkeepers also feel safer while using Paytm for transaction. This is because it reduces the chances of money getting lost between transactions and given that every purchase will be automatically documented, the merchant does not have to record it separately, saving them from loads of work. What also appeals to these merchants is that by using Paytm, they feel that they are also a part of this Internet generation and have their own contribution to give.

Breaking the myth that still a certain section prefers to make cash payments, Nitin Misra spoke about when an auto driver told him, "Bhaiya hume bhi acha lagta hai phone se payment lena" (We also like to receive payments through mobile). With Paytm Force, they have been helping these offline merchants to become e-commerce specialists.

Connecting with customers

Paytm is a classic example of how customers are the best marketer a company can get. Paytm is constantly changing its products and revenue model to meet the needs of its users. Localisation helps lot and that's what they did. They introduced the site in Hindi and other regional languages so that the customer doesn't face language barrier.

When dining with friends and it's time to split the bill, Paytm got that covered too. Using P2P model, one of the friends can make the whole payment and then other friends can send the money to that friend. Other than that with options like Red Envelope, users have a chance to win lucky money on every payment they make.

Other feature introduced by Paytm is instant refunds. When shopping online and then transaction goes wrong or you have to return a product, it could take up to a week to get your money back. With Paytm, you can get instant refunds and that too not hours but within seconds.

People-friendly features like these are the prime reasons for Paytm's success and looking at the continuous innovation, it sure looks like Paytm is here to stay.

Ritu Kochar

Former Staff, Entrepreneur India

Ritu used to work as a Feature writer for Entrepreneur India.

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