Building a Super App: How Paytm is leading India’s fintech revolution

Smartphone apps have come a long way since their inception and have become our primary way of getting things done. Thanks to a thriving developer community, individuals, as well as conglomerates, can leverage a user base of almost a billion users. We have an app for everything. Right from streaming to highly competitive games like PUBG, there’s no creative limitation.

But, a few apps are trying to do more. In simple words, these apps slowly go on adding new functionality that would otherwise require you to download a separate app. When one app can do the job of a dozen other apps, it’s technically called a Super App.

A couple of years back, you needed an app for booking a flight, an app for movie tickets, an app for shopping, an app for your bank transactions, and so on. Paytm, on the other hand, can do all of that from a single app. The point is to build an integrated ecosystem of services so that the user never has to go anywhere else.

Why do we need a Super App?

How was a Super App conceptualized?

Ultimately, WeChat is now a role model for many aspiring fintech companies. The model has proved it can work and companies around the world are trying to replicate it. India has Paytm, South-East Asia has Grab/GoJek, and Japan has Line.

How Paytm became India’s first Super App

2016 — A blessing for India’s Fintech

Paytm became a phenomenal success after India’s Demonetization drive in November 2016. Within a few minutes, high-value currency notes were declared worthless. Everyone was encouraged to get online and start transacting digitally.

At the same time, India witnessed the 4G revolution. After the entry of Jio, data was exceedingly affordable. Smartphone brands like Xiaomi were bombarding the market with affordable 4G phones and within no time, India added hundreds of millions of first-time Internet users. This was the eureka moment for India’s fintech.

With a population of 1.3 billion, only 661 million Indians had access to a debit card. Opening a bank account and getting a debit card takes at least a couple of days. With Paytm, you could just take your documents, get them scanned for KYC, and your Paytm Wallet was enabled. All done within a few minutes.

This was the pivotal moment when India embraced mobile payments. Due to the cash crunch, small businesses like roadside tea sellers also started accepting Paytm. Within a short period, the app onboarded millions of new users as well as merchants. A thriving ecosystem was finally complete.

Payments are done! What’s next?

In 2019, Paytm raised US$ 1 billion from investors at a staggering valuation of US$ 16 billion. Till now, Paytm has raised a little over $2.5 billion in investments. The company claims it has a monthly user base of 140 million, making it the largest payments app in India.

Though, everything’s not as rosy as it looks. Paytm’s losses for fiscal 2018–19 nearly tripled to INR 4,217 crore from INR 1,604 crore in the year-ago period. This expansion has taken a massive toll on its profitability. But experts say the losses aren’t surprising and the company is big enough to sustain profitable operations if it focuses on just the payments stack.

UPI — The secret recipe for building an ecosystem of Super Apps

Paytm isn’t the only Super App

Thanks to one common piece of technology, India is open to Super Apps. Ups and downs are a part of running a business and whether Paytm is able to continue the streak or not, doesn’t matter. In the end, India’s financial industry has massively encouraged digital payments and UPI was the game-changer. Every institution today, whether it’s a young start-up or an established bank, is trying to leverage the full growth of India’s fintech ecosystem. If we look at it, this transformation will benefit everyone massively because digital transactions are easier to trace and tax. Rather than increasing tax rates for the upper spectrum of citizens, this system can bring onboard new users who can contribute indirectly.

Words by Shivam Vahia

Originally published at on February 14, 2020.



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