way, are not in cash. They are in the form of movie vouchers, flight
vouchers, and so on. Cashback is a strategy for us. We have pushed
the Paytm cashback logo a lot more in the last few months.
SR: How have you innovated for users in the smaller towns and
semi-urban India?
VSS: We use a lot of data. Rich users don’t value the 20 rupee
[28¢] cashback. Our engine understands who values the small
sum of money. Our AI is built at Paytm Labs in Toronto. We started
in 2014. We have the ecosystem advantage because we can be
the one stop for many things. We introduced cancellation insurance
for movie tickets. This is a global first. The cancellation value is
extremely low, and our AI engine ensures that it’s an extra
revenue earner.
Here’s another example: India saves in gold. We allow users
to buy infinitesimal amounts of the metal. For example, a user can
buy gold for 11 rupees and aggregate. Buying gold is a wealth service
we offer everyone. Our gold product has more customers than all
wealth management companies in India put together. We have
17 million users.
SR: What will it take to win India?
VSS: Some people still want to pay by card—card transactions
are the highest by value. Others want to pay by wallet because
they do not want to link their bank account to third-party apps for
fear of digital theft. As the market matures, all use-cases as a
combined offering makes sense rather than just one. In the coun-
tryside, there’s huge fear they’ll get defrauded of their money.
Soon as one system grows, fraudsters walk into that system. That
is why we have a large investment in setting up a lab in Canada
building fraud detection systems. We have 110 people there. We
have been lucky so far. We have been working hard. For a payment
company like ours, competition does not come from another
payment company. It comes from hackers.
SR: What’s the life of an Indian entrepreneur like? We had a tragic
suicide recently of the founder of India’s largest cafe chain [V.G.
Siddhartha], who described himself as a failed entrepreneur.
VSS: In India it is particularly tough. Entrepreneurship is looked
down upon, unlike in the U.S. We are just above Africa markets
in terms of per capita income. We have to build a business
model for that. Then there are many rules and regulations,
sentiments, behavior.
Siddhartha’s suicide is heartbreaking for entrepreneurs
like me.
You have to be far more Zen to survive in this country. As I
said, if you build in India, you can go build anywhere in the world.
What do you think is the first thing an Indian kid learns? That the
bus stop is not where the bus will stop.
SR: Is there an IPO round the corner? Some of the most high-
profile companies backed by Masayoshi Son, such as Uber, have
gone the IPO route.
VSS: Masa has never mentioned the word IPO to me. We will remain
private for the next two or three years for sure. I look up to Warren
Buffett, Masayoshi Son, and Jack Ma. Their ambition is to build huge
impact on their markets, cities, countries, business domains. They
are all market share-centric. What I take from them is: First, learn
to do one thing really well. Then build the next level of business on
top of it. That’s the common thread. We’re not even on the prepa-
ration journey for the IPO, which itself takes a couple of years.
SR: Then are you looking to raise funds?
VSS: There is a huge amount of incoming investor interest. People
with large-dollar checks are knocking at our doors. Once we figure
out the business requirement and get the necessary board OK,
we will raise money. We are very well-capitalized for our
business model.
SR: Where is Paytm headed in the next few years?
VSS: Paytm is [dominating] and will dominate India’s mobile pay-
ments ecosystem. Paytm Payments Bank has overtaken India’s
No. 1 mobile bank, state-owned lender State Bank of India. Just
like Ant Financial dominates payments in China, Paytm wants to
dominate in India. We are getting into insurance and lending. We’ve
created world-class tech that can be replicated both in emerging
and developed markets. We built payments from the bottom up
in Japan with Made in India technology. PayPay [a joint venture
among Paytm, SoftBank, and Yahoo Japan] today has 10 million
customers. We will go to the Americas and Europe.Rai is a reporter covering technology for Bloomberg News in Bengaluru.“For a payment company like ours,
competition does not come from another payment company.
It comes from hackers”<GO> INSIDE THE TERMINAL 53