Paytm to invest Rs600 crore over 10 months to expand QR code payment system
Mobile wallet firm Paytm aims to add 10 million merchants enabled with QR codes across 650 districts by December
New Delhi: Online payments firm Paytm, run by One97 Communications Pvt. Ltd, will invest Rs600 crore over the next 10 months to expand its QR code-based payment network, the company said on Monday.
Noida-based Paytm said it is aiming to add 10 million merchants enabled with these codes across 650 districts by December.
QR code, or Quick Response code, is a machine-readable label that contains information such as account details of the merchants.
Paytm first introduced this payment option in October 2015 allowing a customer to scan a code with their smartphones and instantly transfer money to the merchant’s Paytm account.
According to the company, the investment will go into scaling up manpower, technology, cashbacks and merchant education so as to make more users and merchants transact digitally for the first time and become a part of the digital economy.
“Our 0% merchant transaction fee coupled with an aggressive merchant acquisition rate, will help us take QR code-based payments to every nook and corner of this country,” said Kiran Vasireddy, senior vice president, Paytm, in a statement.
Paytm’s QR code-based payment solution is used by more than five million merchants. The adoption of such transactions grew dramatically after the government’s demonetization move late last year.
Consumers use the medium to pay at kirana stores, toll booths, food courts, hospitals and large retail outlets, among others.
Paytm already gets 65% of overall transactions on its platform through QR codes, the company said.
Unlike other PoS (point of sale) machines, QR codes have zero transaction charges and have no cost of installation. However, once a merchant transfers the money from his Paytm account into bank account, he has to pay a minimal transfer fee.
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QR codes are used extensively in China and is one of the key offerings of Alipay, a significant investor in One97-owned Paytm.
Paytm is expecting to replicate the success of China’s Alipay in India by pushing similar affordable technologies like QR code and e-wallets in the country.
Paytm app is today available in 10 Indian languages—Hindi, Tamil, Telugu, Gujarati, Marathi, Bengali, Kannada, Malayalam, Oriya and Punjabi.
Paytm claims to have witnessed a five-fold increase in traffic from smaller towns after the launch of its platform in regional languages.
Paytm founder Vijay Shekhar Sharma is one of the 11 recipients of payments bank licences in the country.
The company is expected to launch the payments bank within the next 30 days and has set a target of 200 million accounts, across current accounts, savings accounts and mobile wallets within 12 months of the launch.
It aims to touch half a billion accounts by 2020. Paytm already has close to 150 million e-wallet users.