By the end of 2018, Paytm’s merchant network will be 15-million strong, chief operating officer Kiran Vasireddy told FE’s Shritama Bose. The fintech player now accounts for 15-20% of all Unified Payments Interface (UPI) transactions. Excerpts:
You’ve announced plans to expand your merchant network. Is there a target, and how do you get there?
We currently have around 5.5 million merchants and we are aiming for 10 million by March-April, and probably somewhere around 15 million merchants by end of September 2018. So, we are aggressively acquiring more and more merchants so that every small and large merchant has access to mobile payments, going forward.
What would be the range of turnovers of these merchants?
For us, the larger mission is to ensure that pretty much every merchant gets on-boarded. For us, it really doesn’t matter whether it’s a large retail format store or whether it’s a small kirana store or a paan shop accepting payments. For us, every merchant is a merchant and that’s how we can digitise the system. Our QR (quick response) code now allows merchants to accept all kinds of payments, such as UPI and cards at zero percent fee. So that is what will drive mobile payments and the acceptance of it more than what it used to be earlier.
At what point are you going to start charging merchants?
We believe that eventually payments as a model should go towards zero. I think the business models being built have been keeping (charges) at zero for a while now and we believe that we will continue to keep it as is for long. I don’t think there’s any plan of revising it any further; we’ll keep it at this. Globally also, the payment charges should be very, very minuscule. I think here (in India), it was high when the traditional payment instruments were being used. We’re glad that the government, the RBI (Reserve Bank of India) and other institutions are trying to bring the cost down closer to zero.
What do you do to prevent merchants from turning inactive?
It is a continuous exercise we are doing. We continuously engage with our merchants to bring them the benefits of being on the network and keep accepting mobile payments. This generally doesn’t end with getting them on-boarded. There are other benefits, like them getting access to financial services, like loans and insurance, which was not possible earlier. So that’s the larger plan. It’s not just about them accepting payments, but also using money to transact online, which they can’t do because they don’t have credit cards or the ones that they have are not any good for e-commerce transactions. By accepting this, it also enables them to go online and transact. If you look at it as a whole, they get a lot of value from being on our platform.
To keep up this kind of engagement, you will need a large number of people. Are you stepping up hiring?
Yes. We already have about 10,000 people and the number has been growing over the last few months. This addition of resources will be continuing in the next year, too. Till the time we get those 15-20 million merchants on our platform, we’ll continue to invest in expanding this network.
What is the volume of merchant transactions you are seeing?
It’s phenomenally large. We’ve seen almost 15-20x growth in the offline space and this has been growing because the moment you add merchants, the moment you add more and more use cases, it brings in a network effect. Overall, we are processing around 300 million transactions a month and 50-60% of it comes from offline merchants.
You have brought UPI on to the platform in November. How has that been doing?
In a couple of weeks of launch, we have gone to around 15-20% of the overall UPI transactions. Probably, in the next two or three months, we’ll be doing more UPI transactions than we are.