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Giving mobile credit a boost

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Seeking a growth strategy

For six straight years, Paytm, India’s largest mobile commerce platform, has turned to India Lab for help guiding the company’s expansion. Launched in 2010 as a prepaid mobile recharge website for parent company One97 Communications, Paytm has worked with India Lab students year after year to refine its product offerings and grow its business. The company today serves more than 100 million registered users. In early projects, India Lab students designed a successful go-to-market plan for Paytm’s mobile advertising and recommended a global expansion strategy. In 2015, Paytm returned to India Lab seeking a strategy for attracting small offline merchants to accept payment through Paytm’s mobile application – a major challenge in India, which has traditionally been an overwhelmingly cash economy.

Conducting market research 

To address this challenge, India Lab’s student team went out on the streets of India to survey local merchants about how Paytm could best meet the needs of small mom-and-pop businesses, where most Indians do their retail shopping. The team then recommended an action plan and a product roadmap to target this market with Paytm’s new mobile payment application. The students also defined key components and features for the app that could help small retailers more effectively manage their stores.

A booming business

Within a year of this India Lab project, Paytm began implementing the team’s recommendations – reaching out to local merchants to persuade them to accept mobile payments via Paytm. In November 2016, when the prime minister of India unexpectedly announced the demonetization of certain banknotes, spurring a boom in cashless transactions, Paytm was well-positioned to seize the opportunity: As of March 2017, Paytm was signing up new merchants at a rate of 100,000 per week.

Krishna Hegde, senior vice-president of Paytm said, “Our partnership with MIT Sloan has enabled us to work with a bunch of  bright young minds every spring as we build India’s biggest and fastest-growing payments ecosystem. Over the years, their insights have helped our organization as we expand into new segments of financial services and expand our ecosystem. Their contribution is much appreciated as we forge our way toward bringing half a billion Indians to the mainstream economy.”