The simplicity of the Paytm app belies its complex architecture and the number of people who work on it. There are about 200 product managers and 700-800 engineers working on different aspects of the app. It’s no surprise, then, that Deepak Abbot, senior vice-president of One97 Communications Ltd, that owns and operates Paytm, describes his company as a technology company rather than a payments one.

Paytm had 200 million monthly active users and processed close to 1 billion transactions in the quarter ended March. Abbot attributes this success to the “tech mindset" of the company. “At the core, and everyone here, including Vijay (Vijay Shekhar Sharma, chief executive of Paytm), is a hardcore techie," he says, adding that this “is another reason we have been able to build a very complex product in a flexible way".

At Paytm, a product is defined as anything a consumer—be it is an end consumer, a merchant or a marketplace seller—interacts with. For example, recharge is considered a product. Paytm’s implementation of Unified Payments Interface (UPI), is also categorised as a product. “Then you build use-cases on top of UPI such as P2P, P2M and B2B payments. Wallet, the most used product of Paytm, is another," Abbot says. P2P, P2M and B2B stand for person-to-person, person-to-merchant and business-to-business, respectively. The idea of keeping all these products within the same Paytm app, according to Abbot, is that users should move from one product to another seamlessly. Integration of multiple products within the same app also helps Paytm cross-sell more easily to customers.

Stickiness of the app is another important focus area, says Abbot. “We have observed that if a customer has only used Paytm for recharge, then the retention rate for such a user is 40% after three months," he says. “But if we can upgrade him to send money to others, they become power users of Paytm and the retention improves dramatically to 70%."

Paytm’s data science lab, Paytm Labs, is based in Toronto. The team, comprising 70 data scientists and engineers, develops multiple software tools. “We just plug those products here (in India) and start using them," he says.

One such tool is the Customer Lifecycle Management (CLM), which “catches every signal from the app". For instance, if you use the app for UPI, it segments you as a UPI user. If you do a recharge, it marks you as a recharge user. It also upgrades you automatically, based on your behaviour or purchase history, according to Abbot.

CLM also segments users. For example, if a premium user, who earlier made a money transfer of 5,000, has not used the app for a month, he will be shown a cashback offer or an ad on Facebook, says Abbot. Similarly, alerts are shown for soon-to-expire mobile recharges and other bills.

The entire user data in the Paytm app goes into a “data lake", and the team in Canada uses it to formulate the rules of the risk engine and other software. The data lake, Abbot says, is a repository of multiple sources of data including phone usage data, transactional data and behavioural data. Machine learning (ML) algorithms train on all this data so that the alerts and promotions can be automated and personalized.

Paytm competes with wallet players such as MobiKwik, FreeCharge and PhonePe. Industry experts forecast bright days ahead for mobile wallets. The number of mobile wallet users is expected to grow from the current 200-250 million to around 500 million in the next couple of years, says Probir Roy, co-founder of Paymate and an independent director at Nazara Technologies.

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