Last year on November 8, when Prime Minister Narendra Modi shocked the country with his decision to demonetise the high-value notes in a nation-wide televised address, the papers next day, rather carried full-page advertisement by mobile wallet Paytm. “Paytm congratulates Honorable Prime Minister Sh Narendra Modi on taking the boldest decision in the financial history of independent India,” the advertisement with Narendra Modi’s face on it said.
15 days later, the newspaper headline read: Paytm touches a new record of 70 lakh transactions. Paytm, which already had a consumer base of 15 crore people and businesses even in the pre-demonetisation era, became the biggest gainer in the demonetisation exercise, while there were other mobile wallets as well such as Mobikwik, Freecharge and PayU. Soon, mobile wallets from banks and the government also made an entry.
Paytm founder Vijay Shekhar Sharma, however, does not want to be called the single largest beneficiary of demonetisation but does find the surge in consumer base post note ban incredible. “The customer base we have achieved in such a short period of time, is incredible and India and Bharat have come together so easily,” he told reporters in February.
Later, at an event, Vijay Shekhar Sharma said that demonetisation won over the entire banking system, “It is very odd for us to believe that we were the single largest beneficiary when it (demonetisation) was going on. There is no doubt that digitisation won over the industry, it won over the banking ecosystem,” he said.
The success story of Paytm post demonetisation is not free from controversies. At first, Paytm had to apologise for using the unauthorised image of Narendra Modi in advertisements, followed by a sharp criticism of its TV ad with a tagline ““Drama bandh karo… Paytm karo.” Political targetting, technical glitches, customer fraud et all kept Paytm in the headline.
A year later, newspapers are again carrying full-page advertisements of Paytm, this time to announce that the company has integrated BHIM UPI in a bid to double its user base in the next two years. And the company has nearly 27 crore registered users.
While there are reports of 40% out of the 65% active users for mobile wallets shifting back to cash, Paytm says that demonetisation made people understand about mobile payments and the mindset of cash first is changing slowly. The Ali-baba backed company is targeting to reach 50 crore user base in next three years.
Besides Paytm, Mobikwik has gained 400% in transactions after demonetisation. The mobile wallet recorded 192% annual rise in revenue to Rs 38.07 crore in the financial year 2016-2017. According to the company, over 25% transactions come from semi-urban and rural users and 75% of our users are millennial.
“About 10 million merchants started accepting digital payments after demonetisation, which is a great thing because prior to that only around 1 million merchants had access to any kind of digital payments method,” Mobikwik’s co-founder and director Upasana Taku told FE in an interview. Mobikwik says that the growth of mobile wallets is going to grow in the next four to five years.
The number of all cashless transaction, which surged rapidly after demonetisation, has also slowed down since March, albeit, continues to remain more than the pre-demonetisation era, the RBI data show. The total amount of cashless transactions stood at Rs 10.7 lakh crore in the month of August.