India’s payments ecosystem is a fiercely contested field with multiple players battling to gain share at a time many more customers are using digital channels for financial transactions and bill payments. At the same time, the merchant ecosystem to accept digital payments is also growing rapidly.
Financial services provider Paytm, which claims to have 20 million merchants on board, has now set an ambitious target to cover 50 million merchants over the next two years. As a part of this push, the company, on Tuesday, launched Paytm Smart POS (point of sale), which allow merchants using NFC-enabled android smartphones to start accepting debit and credit card payments.
Essentially, the merchant’s smartphone itself will now become a point of sale terminal and the merchant will not need to buy a separate card swipe machine.
“Now your phone machine itself could act like a card acceptance machine. RBI has allowed to use (NFC-enabled) cards to tap and make payments up to Rs 5,000, which is more or less 80-90 per cent of retail payments in this country. Now, the obligation of buying a separate device is removed because Android with NFC and various certifications can become your card machine,” said Vijay Shekhar Sharma, founder and CEO of Paytm.
This card acceptance feature will have to be enabled by a merchant through the Paytm for Business app on their android smartphone.
“Contactless payments or tapping to pay with a contactless card or mobile device, have fast emerged as the preferred way to pay globally, with nearly 60 per cent of Visa transactions outside of the US occurring with a tap. Paytm’s foray into the contactless card payment ecosystem will truly help propel the adoption and usage of contactless cards across India,” said T.R. Ramachandran, group country manager, India and South Asia, Visa.
From being a mobile wallet, Paytm has grown significantly in the last few years. It has 328 million wallet users, 145 million UPI (unified payments interface) handles, and its payments bank has 64 million bank accounts. Paytm hopes the launch of the new soft POS model will attract millions of new merchants on its platform.
“There are 64 million SMEs (small and medium enterprises). At Paytm, we are benchmarking ourselves that how fast and how long will it take for us to take 50 million on the card payment network. We have set our bar high by setting out (to grow) this 20 million to 50 million merchants in the next two years,” said Sharma.
Paytm, on Tuesday, also launched a new version of the Soundbox. This device offers instant voice enabled confirmation when a merchant receives payment from a customer. The Soundbox 2.0 comes equipped with a digital screen that provides instant visual confirmation of the amount a customer has made along with the voice-based response. Merchants will also be able to get a payment summary for the entire day through this soundbox.
Paytm hopes this iOT (internet-of-things) device will reach five million merchants by the end of next year.
Paytm, already among the largest digital financial services platform clocking over 1.2 billion monthly transactions, expects this to grow significantly over the next few years.
