India-based digital payment giant Paytm says it hopes to become profitable in the coming years as it plans to develop a new business strategy.
Vijay Shekhar Sharma, the 41-year-old billionaire founder and CEO at Paytm, who leads One 97 Communications, the parent firm of Paytm, told the Financial Express that the company will be focusing on financial services as its next main area for growth and development.
Sharma noted that Paytm’s business growth is divided into three major categories, with the first three years being spent on identifying the appropriate product-market fit. The next phase was revenue growth and monetization, while the final phase will focus on increasing profitability and opening up cash flows.
Sharma remarked:
“We are in the second phase of that journey.”
Paytm introduced QR codes in 2015 and a few years later, it completed its product-market fit. The company is now focused on becoming profitable, Sharma confirmed.
Sharma added:
“I would say at least two years because we are also a large dominant market share company and we wouldn’t want to lose market share while becoming profitable next quarter.”
Sharma pointed out that Paytm had managed to reduce financial losses during the past year because it had found ways to monetize its services. He revealed that the Paytm Payments Bank, e-commerce and cloud had become profitable businesses, meanwhile, Paytm FirstGames and Paytm Mall were getting closer to being profitable.
Responding to a question about subsidiaries operating under One 97 Communications that might be preventing the firm from becoming profitable, Sharma noted that investments were mainly focused on increasing the firm’s offline user base.
He stated:
“Overall, offline merchant expansion and technology is where the investment is happening.”
Paytm’s management recently confirmed that its planning to onboard around 10 million vendors to its platform within the next 18 months. The company’s platform reportedly has over 16 million merchants across various sectors.
Paytm has launched an all-in-one payment gateway and business platform, and an Android-powered point of sale (PoS) unit.
Paytm recently partnered with ride-hailing app Uber in order to add credit and debit processing and will allow customers to easily perform card transactions.