How do Paytm Earn Money

How do Paytm Earn Money

By: abhay12

How Paytm earns MoneyPayTM is no new name when we talk about online money transfer and wallet apps. It is the most famous and one of the leading mobile commerce platform in India. It is also most widely used as online money transfer app in comparison of Freecharge, and Mobikwik. Most of us usually think that How PaytM makes money even after they provide cash back to their customers? And the question is totally legit as today we will discuss How do Paytm Earn Money and in that we will take a closer look at Paytm Business Model.

Business Model of Paytm

PayTm Business Model is basically a marketplace model which provides various services to its users like e-wallet, making payments, recharge & bill payments and various other banking options. It was started as recharge service provider in the year 2000 by its parent company One97 and after that, they have changed their business model to a marketplace and a virtual bank’ model and also felicitates cashback business model. Basically PayTm is not a traditional E-commerce cum Payment Gateway company. In fact, it is a booming Payments Bank Company. Their revenue lines can be classified into the sub-categories such as:

  • (Web E-Commerce, App-Commerce etc)
  • Payments & Wallet Integration & TDR (Transaction Discounting Rate)
  • Payments Bank
  • Seller Services

How Paytm makes Profit

How Paytm makes Profit

In Paytm annual report 2016, the company recorded the a value of $4 Billion which also included a stake of one of the huge marketplace leader-  Alibaba. PayTM’s parent company one97 introduced an effective planning for its revenue model.

The Paytm Revenue Model can be divided into these categories.

  1. Recharge Services
  2. E-Commerce Marketplace
  3. Paytm Wallet
  4. Paytm Bank
  5. Bill Payment Services
  6. Buy and Sell

How does Paytm make Money?

PayTm only started as a Recharge services provider company but now the main reason behind the growth of the company is due to its revenue model so, let’s check out how do Paytm Earn Money –

1.) Recharge Services

First things first, as told earlier that the company started as a recharge company and only consisted mobile recharge services for mobiles, TV channels subscriptions, metro card etc were the services that were provided by PayTm, in the beginning.

So how does PayTm earn from recharge services? Well, that’s pretty simple, it charges commission from the operator’s company.

2.) E-Commerce Marketplace

PayTm is the first company that started as mobile marketplace company in India. It has over 120 million buyers and 2 million daily transactions are done every day. PayTm is an open marketplace for sellers, the more there will be sellers the more there will be competition between them which ultimately will result is less prices of goods and services. Hence, more customers will be attracted.

How does Paytm make Money

PayTm generates money by commission from sellers and by doing their promotions of brands and products on their website too.

3.) Paytm Wallet

Most of the people would be thinking that how paytm wallet works? Well, it’s just a virtual wallet which acts just like your regular wallet. The only difference is that you don’t have to carry weight wth you always to make payments. As we have stated above that Paytm Wallet app is a digital payment instrument by which you can transfer money from your bank account or credit card directly to do the online transactions on the go. So #PayTmKaro

paytm wallet

How does Paytm earns through Paytm wallet?

The money which a user deposit in his PayTm wallet is stored in the Escrow Account with a certain bank (as per RBI Guidelines). The Escrow account pays certain interest to PayTm as agreed in the contract between the Bank and PayTm.

Escrow accounts interest is decided on the basis of the average deposited amount in 58 weeks.

4.) Paytm Bank

PayTm Bank will not be only limited to semi-closed wallet app, the company has decided to increased their Banking services to fully fledged services like other Banks just like ICICI, SBI etc. PayTm will offer various services to its users and is expected to make a huge difference in the Indian Banking Services.

The services that the company will provide to its customers and that is how they will earn money just like the other banks earn.

5.) Bill Payment Services

PayTm also provides Bill payment services to their customers by which users can electricity, telephone, water, mobile, broadband, gas, etc. The company earns just as same as they earn by recharge services. That is, by charging commission from the operator’s company.

6.) Buy and Sell

On PayTm has everything on their website from bikes and cars to concert tickets, bus, trains, movie tickets, flights, hotel rooms, concert show tickets, amusement park tickets etc.


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