The Man Who Wrote The Slow Death Of Cash Over 850,000 offline merchants across India accept Paytm as their preferred payment mode.

November 8, 2016

"Vijay was sitting at an award function,in Mumbai, when Harsh Goenka, who was also present at the event, congratulated him immediately after the PMO directive went public. Vijay along with his 4,000 plus employees immediately got into action. Reacting to the recent announcement, he gladly shares, "I call this the start of the golden age in the country for financial and tech companies."

The grin has just gone wider on Vijay Shekhar Sharma's face. The jovial man, who breaks into laughter at the drop of the hat, Vijay, is currently the happiest person on earth. The recent announcement by the Prime Minister Narendra Modi to demonetize existing Rs 500 and Rs 1,000 notes and limit cash withdrawal has resulted in history being created by Paytm. For him, this was the moment, where he could cash in on the cashless drive.

His call to action was quick. Instead of reaching out to the retailers, they went across to publish Paytm handbill and stickers, which could be pasted on shops, to inform the retailers and customers about an alternative mode of transaction, which is from the future. India's largest payments and commerce platform, Paytm, closed the second week of November with 50 million installs on Google Play Store with the android user-base growing to over 75 million.

The company had also touched a record of five million transactions a day. Over 850,000 offline merchants across India accept Paytm as their preferred payment mode. Backed by a large payment ecosystem of customers and merchants, the company registered a 700 per cent increase in overall traffic and 1,000 per cent growth in the amount of money added to the Paytm account over the last couple of days.

During this period, the transaction value continued to be 200 per cent of the average ticket size while the number of app downloads went up 300 per cent. Vijay's company was last valued at $5 billion. With current user base of more than 150 million, Paytm is on a mission to bring half a billion Indians to the mainstream of economy using mobile payments, commerce and soon to be launched payment banking services. The three way approach that Vijay took post the announcement was team mobilization, marketing mobilization and product mobilization.

"Firstly, we knew that multiple signups will be the most important obligation. It started by attempting signups by teams so every team was now going to sign up in every city we are available. We also took up other marketing approach to make Paytm more visible. We said while the rest of the things can happen later; let us do the payment process language first. We quickly launched 10 language app also. Our product team, marketing team, operations team, and sales team everybody was involved in this," explains Vijay.

The Sharp But Shy Kid

A visit to Noida, part of Delhi NCR, which houses the offices of Paytm and One 97, Paytm's parent company, on parallel lanes, will showcase the openness Vijay shares with his team in the open office culture. Right now, the third floor of the One97 office is under construction; apparently, a new set of senior professionals are expected to operate out from there. Vijay is busy, not in counting the number of transactions on Paytm app, but in discussing the right paint for the new walls with the interior designer. Currently, he is looking at the bigger picture.

And, for the rest, he says, there is a team for that. The man-incharge is a very approachable person. Anyone, who has to reach Vijay, comes and asks for him. There are no such set rules or reminders apart from the usual board meetings of course. Even if he is in a meeting, the employees can reach out to him over the phone.

However, things were not like this from the start. As a child Vijay was totally an introvert. As per Vijay, he has started enjoying people recently as he feels he can now hold a conversation. "I felt down because I did not have a goodcommand over vocabulary and I was extremely cautious about choosing the right words. Whenever someone visited our house, my mother used to tell them, there is a bride in our house, go and meet her," shares Vijay.

This confident man, however, doesn't show any signs of anxiety today. He says, "I do not live in everyday anxiety. Last time, I had anxiety was when we were raising money from Alibaba and there was a last level of negotiation." The company's investors include Ant Financials (AliPay), Alibaba Group, SAIF Partners, Sapphire Venture, Mediatek and Silicon Valley Bank.

Vijay manages to stay stress-free while working out everyday problems, he says, "If I have a big day ahead, I go for a swim, I think a session of exercise gets you started in the right way and you can work till late evening." Vijay starts his day by going through his notifications and emails along with enjoying a steaming cup of tea or coffee. Then he drives his kid to school, whenever he is in Delhi, before leaving for the day.

Talking about how the Paytm moment began, Vijay shares, "The excitement of building something is so immense that it supersedes negative energies, it is so incredible that you can get something new to do. When Paytm got started it was mainly incubated. Two things happened, one, we were working on feature phones and smart phones for converting the business from feature phone to smart phone. Secondly, we had teams which were building different things, somebody was building games, somebody was building advertising, payments, commerce and while doing this we realized payment is a more fundamental problem and we can build a business on that".

"We started off as a humble payment gateaway for smartphone users. At that time we wanted to develop an app, which would help you pay. Once the payments business stabilised, we applied for a payment bank license, which was nearly an extension of our payment activity," adds Vijay.

Seven years back, when the company was still new, Vijay held most of the things with him as he was trying to make it a scalable organization. "We were trying to go to 100 crores and at the same time we were also trying to spend less money," admits Vijay. When asked if having a marketplace and payment model both added to its advantage, Vijay adds, "Payment is a two sided business. You need consumer and merchant to be equally active. Driving both the sides is very costly and complex, especially in the launch days. Independent payment companies are nearly like an orphan, who need support from everyone and everyone supports them but nobody takes full ownership.

In our case, we made our own destiny by building our own market place, where consumers could come; instead of waiting for others to accept us. We spent lot more money than the traditional payment companies to build a system to solve the problems of both the sides. And now, it is skilled and more integrated, and I think today's world respects more integrated companies than previous one".

Taking a cue from his inspiration, Steve Jobs, on building an integrated company he says, "Apple started with chip designing and hardware design to iOS, software apps and went to retail. Today, Apple is the most integrated company and that is what exactly we are aiming at. We are taking care of our own payment, acquiring consumer, merchant, banking; we are a vertically integrated product here. We are open like Apple; as in we do not let any other aggregator get in but we let everybody come in. The approach of our business is, "we believe that integrated works are better in marketplace".

On lessons he learnt in the marketplace model, Vijay says, "There are two ways a payment company can do this; they can be a better option for third party like cinema websites or aggregators or we can bring booking on our own platform. We have been an option of payment to internet destinations. From mid 20 per cent this kind of change moved to more than 40 per cent in three month of our launch. We gave a new set of customer, which otherwise was not going to happen. We have taken a role of building a market and I have learnt India is a market yet to be built in digital and online space."

Ask Vijay his ultimate aim and pat comes the reply, "I want to be remembered as a man who created a 100 billion dollar company out of India. Overall it is a very generic model where you are trying to build high demand, get traffic and trying to build large number of supplies, so in a way it is a Walmart model and also in a way it is an Apple model. However, we will not be a like Walmart or Apple model but….All the companies after reaching a certain size have an obligation to do new things."

Answering if it leaves him cautious, he says, "The mistake people do once they are successful is getting used to it. No success entitlement remains forever and neither does a failure remain always. We are as aggressive and as paranoid as the new person is in that vertical."

Coming from a modest background, Sharma shares his belief system- no fear and no greed. "If you fear and you don't do it; only the big gets it. And if you start bleeding when you slip on a road and don't get up; you won't be able reach where you were supposed to be," states Vijay.

Are we digitally inclusive

Talking about the biggest challenge at this stage, Vijay says, "We have been a technology company and we will be a banking company also now so, one of the things we will be doing is splitting the company into two parts. One is banking and the other is the parent organization. Banking will have all the regulation rights and the control of the business. And the parent organization will do rest of the work and the revenue business. Moreover, we will also need to do physical distribution, retail at a large level for substance and money, as a product, while we have significant market share in online. Another thing is, we are relying much on the fact that consumers will move digital in terms of banking, ie more consumers will use smartphones for transactions and that is a lot of behavior change one can see. Changes are slow but they will soon become a habit that is exactly we are doing, changing habits."

(This article was first published in the December issue of Entrepreneur Magazine. To subscribe, click here)