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Business News/ Mint-lounge / Features/  PayTM | The 10-second gateway

Past life

PayTM was incubated at One97, a mobile value-added services (VAS) company launched by Delhi College of Engineering graduate Vijay Shekhar Sharma in 2000. Before One97, Sharma had launched another enterprise with college mate Harinder Takhar, now chief executive officer of PayTM. This was in 1997, explains Takhar. “We went to all sorts of companies saying, ‘Hey, we know this Web thing. We’ll build a website for you.’" Takhar and Sharma sold the enterprise—Xs! Corporation—to an American company in 1999.

Takhar then worked with One97 for two years before going to France for a master’s degree in business administration from the Insead business school. In 2006, he moved to Helsinki, Finland, to work with mobile phone maker Nokia. In 2009, he joined Research in Motion (RIM, now BlackBerry) in Canada, first in a strategy role and then in product development. “RIM, at that time, was working on the new platform—the Q10, the Z10. I was the product person working on what they called the core products—mail, contacts, phone and calendar," says Takhar. He returned to Delhi to join PayTM in late 2011.

Eureka moment

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It was a slow build-up. They began with one operator—Airtel—on board, adding others along the way. It was also slow going trying to convince customers to park their cash with the company ahead of making purchases. “Online commerce starts with a level of distrust. People have concerns about what is finally going to be delivered to their homes, what the merchant will do with their money. Every now and then you hear of frauds. But sometime in the middle of last year, we did 100,000 orders in a day…. That was like, ‘Hmmm, we must have done something right,’" Takhar says.

As of May, PayTM had six million users, one million of them on the PayTM Android app, says Takhar.


In 2009, some “dudes" at One97 were bandying about business ideas at their office in the National Capital Region (NCR). The challenge: The mobile world was changing as smartphones became more accessible, and more popular. “We were already selling a lot of digital goods through the (telecom) operator," says Takhar. “An example would be a caller ring-back tune—you hear a tune you like, and you get that using an operator wallet. But if you are on an Android or iOS smartphone today, you hardly buy those things. You don’t buy a ringtone, for example, you’ll download or pirate a song and set that as your ringtone. As people move to smartphones, they will find out different things to buy, and the payment methods will also be different."

The team got talking about how annoying it was when the Internet connection timed out just as you were about to pay for a mobile phone recharge or movie tickets. They wondered if they could eliminate steps such as redirecting the customer to the bank website to pay, to speed up the process. So One97 incubated PayTM, which offers a mobile wallet that consumers can access through their Android or iOS phones or the PayTM website.

Takhar says One97 decided early on to set up PayTM as a separate arm. “The reason we went down the incubation path was to make this team more agile, and be much more accepting of mistakes," says Takhar. He adds that it’s easier to allow for failure when you’re a “skunk works project in a big company" than if you’re a manager who is tied down to profit and loss statements.

Reality check

PayTM had some big misses initially. The engineers tweaked the interface in the first year to make it more user-friendly, but the changes just ended up confusing consumers. They tried to maintain a history of customer purchases and offer the same products to repeat buyers. But that just annoyed consumers who would waste their time navigating old shopping lists to get to their new requirements. “We thought we knew better than the consumers what they wanted. Our hypotheses fell flat on our faces," says Takhar.

Also, as more consumer traffic came their way, their website crashed several times. Their entire system had to be overhauled four times in two years. Takhar clarifies they got the system back up in 60 seconds and began devising a patch to add more capacity each time, but “it’s a bummer when your unique proposition is to get the job done in 10 seconds".

Plan B

Takhar is confident that “Vijay would never let this (venture) fold". He says there is no “give up (in business), just tweak as you go". He adds that if he weren’t working with PayTM in the NCR, he would be doing something around money and mobile phones in Canada or
the US.

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Ninety-nine out of 100 times, transactions are completed within the advertised 10-second frame, says Takhar. If the bank server is down or the service provider is not working or there is a power outage or your transaction has just slipped through a crack somewhere, it’s no longer your problem. PayTM will try and try again for you—till the job is done.

“It doesn’t matter if it’s 3am on a Saturday or if you’ve just reached out to us on Twitter.... By the time you wake up in the morning, we’ll email you or phone you to say ‘Job done’," assures Takhar.

Moreover, PayTM does not flood you with ads. There are coupons displayed on the second page, but there’s also a prominent skip button right on top.

“If you are here to do a prepaid recharge, we figure out what we need to do to get you to the prepaid recharge done as quickly and as reliably as possible. So anything that comes in the way, we’ll eliminate it," says Takhar

Previous Cool Ideas issues: 2007, 2008, 2009, 2010, 2011 and 2012

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Updated: 15 Jun 2013, 10:41 AM IST
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