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Digital payments giant Paytm is exploring ways to grow revenue and reduce losses. Paytm’s parent One97 Communications Ltd (OCL) is devising strategies to monetize its 20-million-strong merchant base in an effort to achieve break even at a group level over the next 12-18 months, after which it will consider an initial public offering. The firm is also looking at new payment devices that can provide real-time Goods and Services Tax (GST) reconciliation for merchants. It is also eyeing a licence for the New Umbrella Entity (NUE), for which it has partnered with Ola Money, ZetaPay, IndusInd Bank among others to focus on use-cases such as micro-merchants and cross-border payments.

On Tuesday, Paytm announced the launch of its soft-point-of-sale solution, which allows merchants to accept card-based payments by tapping on their smartphones. It also launched the upgraded Soundbox 2.0 device, which is an instant voice-based confirmation device when a merchant receives payments. In an interview, Paytm chief Vijay Shekhar Sharma spoke about the company’s renewed aspiration to monetize payments and bolster its new forays. Edited excerpts:

What are your aspirations with the NUE licence that you have applied for?

There isn’t a particular use-case that we are pitching for. We will definitely look at various payment segments such as small merchants, organised retail, transit and cross-border payments. There is still a large opportunity for innovation in payments and we have tried articulating that in our proposal. No solo company can distribute all kinds of payments. The success of National Payments Corporation of India (NPCI) is a good example of what NUEs can achieve in this country.

What more can we expect from Paytm’s monetization strategy?

Financial services is a bright spot and similarly, payments is also now becoming a contributor (through the internet-of-things (IoT) payment devices being launched. We are running our credit card beta, have Paytm Postpaid for lending and then wealth management through Paytm Money. Unlike last year, this year, the commerce business including travel and event ticketing will be a bonus, adding to our revenues, since we have seen recovery on these fronts. We will continue adding more financial features for merchants and consumers.

Will OCL further trim losses this year? What are your concerns about Paytm?

We are clearly focused on breaking even and the pandemic has accelerated our plans. As a group, we will break even in 12-18 months, and we are on track. Post breaking even, we will focus on the IPO.

I think one of the worries I constantly have for Paytm is whether the company is spreading too thin, which will not allow it to make the best of the opportunities that lie in front. We have to cut down on the number of opportunities we chase which is already too many for us.

What are some of the newer offerings Paytm is focusing on?

We are getting ready for 5G deployment in the country and preparing our IoT-based payment devices portfolio accordingly. We have launched several devices and we have more devices and use-cases in the queue. For instance, if someone is paying through a dynamic QR, can one take the details of the invoice and show the GST component of the total payment a user is making, real-time. One of our devices will focus on that and is still currently in beta.

How is Paytm tackling commerce, especially with talks of consolidation of Paytm Mall?

Not all businesses have heyday at the same time. We have looked at commerce through merchants who are using our payment service, and the focus always has been to bring commerce opportunities to these merchants. It is still a unique and under-served opportunity, and we will continue looking at it.

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