The Downfall of Paytm: A Case Study in Strategic Missteps

https://doi.org/10.34047/MMR.2024.11204

Abstract

This research paper examines the trajectory of Paytm, a pioneering force in India’s digital payment landscape, founded by Vijay Shekhar Sharma in 2009. Under the umbrella of its parent company, ONE97, Paytm has experienced substantial growth and diversification, marked notably by the introduction of the Paytm Wallet in 2014, which has garnered a user base of 33.70 crore individuals. The paper delves into Paytm’s financial performance, including revenue and profit figures, highlighting both successes and challenges faced in recent years. It also explores the revenue streams from both consumers and merchants, shedding light on the company’s B2C and B2B operations. Furthermore, the study investigates Paytm’s strategic initiatives, strengths, weaknesses, and threats, analyzing critical mistakes such as overlooking the UPI market and the impact of significant investments from Alibaba. Additionally, it discusses key milestones in Paytm’s journey, including regulatory hurdles and penalties faced by its payments bank division, elucidating the complexities of navigating regulatory frameworks and compliance standards in the digital finance sector. Through an in-depth analysis of Paytm’s evolution, financials, strategic decisions, and regulatory challenges, this paper provides valuable insights into the dynamics shaping India’s digital payment ecosystem and the broader fintech landscape.