New Delhi: Digital entrepreneur Vijay Shekhar Sharma and his Paytm has hit the jackpot with the surprise move by Prime Minister Narendra Modi to scrap old notes of high denomination, thus sucking out 86% of cash from the system. Sharma speaks to Zakka Jacob on how his one-year-old firm is coping up with all that demand as merchants and end consumers make a beeline to sign up as the country makes the painful transition from a cash-dependent to digital-friendly economy.
Q. You have described this move by the PM as a gamechanger, as a revolution in your business. Could you elaborate?
There has never been a better stimulus to financial technology in this country. The PM went ahead and said that India will become cashless. This is the start of a golden age for financial technology in this country.
Q. In the last 15 days, you’ve added 5 million customers?
Every day we are adding half a million customers. So in the last 15 days, more than 7.5 million customers have come in. We have also started acquiring more important and critical elements, which are the merchants, the shopkeepers, who are accepting Paytm. With the interesting digital wave that has come, shopkeepers want to accept digital money. Thousands of merchants are in wait list now, we are every day getting a larger number of merchants ready to sign up. Until last week, we used to sign up thousands of merchants per day. Now were signing 50,000-70,000 do-it yourself merchants a day, effectively what is happening is India is transitioning into a digital economy.
Q. In the next 50 days, how many more merchants are you expecting, 50 days is what the PM says is the transition phase…
Instead of more subscribers I am looking at more merchants because subscriber acquisition can happen independent of merchant acquisition because we can promote marketing campaigns. We have done that in past. The number itself is incredibly large: 150 million. India has about 1.5 million POS devices where you can swipe your devices. Paytm within last year started as an offline model, we now have same number of merchants, close to 15 lakh, who are small and medium size enterpirses companies and individuals. We are targeting this to grow from 1.5 to 15 million, ten times bigger than today’s number, before the end of this month.
Q. As staggering as those numbers are, it’s a great idea to go cashless, which is the way forward. But in a country like India where a third of people live below poverty line, how truly cashless can you go?
No revolution happens overnight. And demonetisation that happened overnight has to literally be solved overnight. So first of all, can the country become cashless in a short time? The answer is obviously No. But the new norm of India will be that let’s say that the country, which has 14-15% cash in circulation will become 7%. When we speak of 50% less currency in circulation we are also talking about 50% growth in economy. This is definitely massive amount of pain in short term, but it is actually far more amount of gain in long term. And whenever somebody has set too ambitious a goal, there is lot of pain that common people go through but consumers accept it. What I admire is the bold move to take on this problem in this country: cash is more misused than digital in this country.
Q. You have also been targeted, maybe unfairly, by Opposition parties that this policy is skewed towards companies like yourself. The full page-ad that you made after PM's announcement…
We're just answerable to our customers, no one else
Q. As Vijay Shekhar Sharma it doesn't matter to you?
If you're on a mission and start to bother about whatever everyone else says, then you'll never reach you goals. We're answerable to customers, consumers and regulators
Q. The demonetisation announcement was sudden, it took everybody by surprise. There have been implementation woes. Do you think it could have been better planned?
Bold decisions can only be taken by a bold individual. No preparation is ever enough when you are talking about such jumbo chains. India is iconised by Jumbo the elephant and remember when Jumbo moves, people give their aarti to that and this is that moment for this country
Q. You've spoken in the past about linking Jan Dhan accounts to digital wallets and to direct cash transfer. Do you think that would be gamechanging?
I always said wallets are way forward for payments. We are also going to launch a payment bank in few days. Our belief that like the tons of payment banks that government is launching, we can launch ours too soon.
Q. Alibaba, the Chinese e-commerce giant is the biggest investor in your company. So a majority of the profits are going to them… Or does it all matter in a globalised world like ours?
Paytm is an Indian company and will make India proud, everything else is an agenda. Right now what we see is an incredible opportunity to invest in the market.
Q. What about bringing in your own digital e-gateway?
We will take Paytm to the world, what we are building is not just for India but Paytm has a game-changing opportunity to reach to other 5 billion who have not been served by traditional technology companies. We believe that in India we have something that can go as a global product out of us.
Q. How many hours of sleep are you getting these days?
I don’t need to sleep, I am living a dream.
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