What Can India’s Paytm Mobile Payment System Teach Product Managers?

Paytm is trying to take the place of cash in India
Paytm is trying to take the place of cash in India
Image Credit: Kiran Jonnalagadda

I live in the U.S. When I want to buy something, I have roughly four different options for how I can pay for it: cash, a check, credit cards, or PayPal. In India, they have traditionally only had one option: cash. In the past few years, the global credit card companies have started to arrive in India, but it has been slow going and not that many stores accept credit cards and not that many people have credit cards. This has opened the door for online payment solutions to start to offer their services. Paytm is one such firm and their product managers have done an excellent job of conquering the Indian payment market.

How Paytm Become So Successful

As is the case with every startup, just a short time ago Paytm didn’t even exist. Paytm was launched in India in 2010. The original goal of Paytm was to provide a mobile phone recharge and bill payments service. When this offering took off, Paytm changed their product development definition and expanded to provide payment services for buying movie tickets and paying an electricity bill. Paytm could also be used to buy groceries or transfer money that you owed to someone.

The rapid growth of Paytm has been impressive. Currently, over five million merchants in India accept payment using Paytm. This becomes even more impressive when you realize that this is 5x the number that currently accept credit cards. Paytm currently has 225 million mobile wallet customers. This is 4x the number of customers that the nearest Indian mobile payment company has. All of this would look good on a product manager resume.

Paytm was just another online payment system in the early days. However, then Uber, the ride sharing application, came to India. The company got into a disagreement in 2014 with India’s central bank who put restrictions how they were going to accept credit card payments. Paytm approached Uber and offered to allow their customers to use Paytm’s mobile wallet as a way of getting around the problem that they were having with using credit cards. This allowed Paytm to capture a new group of tech savvy consumers.

Challenges That Paytm Faces Going Forward

India is a very, very large country. What this means for the Paytm product managers is that they are going to be facing a number of big challenges as they go forward. One of the biggest challenges is that they are not the only Indian startup that is trying to attract customers to use their online payment system. Other competitors include the firms MobiKwik and FreeCharge. In addition, Samsung has just launched their Samsung Pay in India. Additionally, other popular mobile applications such as WhatsApp are also thinking about launching online payment services.

One big challenge that Paytm may be facing in the future will be coming from the Indian government. The government has launched mobile payments system. This allows users to transfer money between user’s bank accounts. Once again, since there are so many people in India, there will probably always be enough people to keep all of the competitors to Paytm in business and competing with Paytm.

The Indian financial system has been undergoing some significant changes lately and these can both help and harm Paytm. The Indian government has decided to take steps in order to both cut corruption and do a better job of collecting taxes from citizens. In order to make this happen, the Indian government cancelled 86% of the currency that was in circulation. Paytam hopes that this move will cause people to start to stop using cash and start to use the Paytm service to make purchases.

What All Of This Means For You

The Indian market is very, very large and very, very diverse. Attempting to create a product that will succeed in this market is a huge challenge for any product manager. The company Paytm has decided that it wants to compete with cash in India to become the most popular way to complete sales transactions. It has a good start, but the Paytm product managers are going to have to take a good look at their product manager job description because they still face a number of challenges.

Paytm is a brand new company – it was started in 2010. It started out as a way to pay your mobile phone bill and has grown into an application that can be used to pay for just about anything. The company has millions of users and over 5 million stores that support using it to make payments. Paytm was just another online payment company until they partnered with Uber in order to make paying for rides easy to do. Paytm faces challenges in dealing with other companies in India who are competing for the same customers. The biggest of these competitors may turn out to be the Indian government who has also launched their own mobile payment application. The changes that the Indian government has been making to its currency may turn out to drive more people to making payments using online services.

The Paytm product managers have done an excellent job of getting their online payment service started in India. Now that they have reached a good size, the types of challenges that they are facing will start to change. They are going to have to deal with new competitors and find out how to retain all of the customers that they have already been able to gain. India is such a large market that there is a great deal of potential for Paytm to turn into a very large success!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What other services can Paytm start to offer in order to distinguish themselves from their completion?

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What We’ll Be Talking About Next Time

Hopefully by now we are all aware that Amazon has purchased Whole Foods and has gotten into the grocery business in a big way. However, what a lot of product managers may not be aware of is that Amazon’s grocery dreams don’t stop with Whole Foods. Instead, they have their own plans about changing their product development definition and finding out what an Amazon grocery store that they built from the ground up would look like. What lessors are product managers going to be able to learn as we watch Amazon expand even further into the grocery business?