Companies

PayTM eyes utility firms for share in services pie

Abhishek Law Kolkata | Updated on June 23, 2013 Published on June 23, 2013

Mobile payment services firm is expected to break-even by 2014

Mobile payment service firm PayTM, which also retails mobile wallet facilities, plans to tie-up with utility companies for intermediation. Services would include payment of water tax and electricity bills.

According to Harinder Takhar, CEO, PayTM, at least 32 agreements, with various State electricity boards and infrastructure companies, are expected to be struck by the end of this year.

Some of the tie-ups that the company has already entered into include the Hyderabad Metropolitan Water Supply and Metropolitan Board and discoms such as North Delhi Power Ltd (a Tata Power and Delhi Government joint venture); BSES Yamuna Power Ltd; and BSES Rajdhani Power Ltd.

“We are exploring other segments, some of which are likely to materialise during the year,” Takhar told Business Line adding that a huge mobile subscriber base and increased smart phone penetration will help the company grow.

Business Model

PayTM, which currently has mobile recharge facilities, toll tax payment (for Delhi only), bus ticket bookings and payment of DTH services, operates on both a desktop as well as mobile platform (through apps). Apps are available on Google’s Android and Apple’s iOS.

It operates on the Immediate Mobile Payments Service system that links mobile numbers to bank accounts and allows online transactions using credit or debit cards. Under mobile wallet services, people can deposit virtual money with PayTM and it can then be used for making bill payments or recharges.

“Most transactions are completed within a 10-second time frame,” Takhar adds.

Revenues

PayTM earns a “dealers’ commission” on prepaid recharges while post-paid bill payments are made at a cost of Rs 10 for each transaction. Utility companies pay between Rs 5 and Rs 15 per bill to PayTM. The company also offers deal coupons. In some cases, redemption charges are levied on merchants for the coupons. An SMS-based service that allows a user to send a message in making a transaction has also been introduced.

According to Takhar, PayTM is expected to break-even by 2014.

Launched in 2009, Delhi-based One97 is the parent company.

One97, which delivers mobile content and advertisingservices, has been able to raise capital from marquee investors such as Intel Capital, SAIF Partners and SAP Ventures.

> abhishek.l@thehindu.co.in

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Published on June 23, 2013
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