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How Paytm Earns Money? Paytm Business Model?

December 16, 2022 in Case Studies

India is a country with many aspiring consumers looking for quick payment platforms. And Paytm is the most popular Indian digital payment system. From small merchants to largescale shopkeepers, everybody prefers to use this digital payment system. However,  how Paytm earns money? Let’s learn in detail.

See Also: How Does Google Pay Earn Money? (Complete Guide)

Rise of Paytm

On August 2010, Paytm began with a recharge platform for recharging pre-paid mobiles and DTH services. Later, in 2013, it opened up for data cards, postpaid mobile, landline payments, and more. Moreover, a year later, in January 2014, Paytm introduced its digital wallet for payment options. Indian railways and Uber became the first to include Paytm wallets as one of the digital payment options. 

rise of paytm

Further, from 2015 onwards, Paytm was the most preferred digital wallet to pay for metro recharges, electricity, gas, water, and more. Paytm wallets also help us book travel tickets at reasonable prices. Furthermore, firm backing and support from Alibaba Group and Tata group helped the digital payment service to bring its valuations in billions. 

How is Paytm business model unique?

Now that we know about the rise and evolution of Paytm, the answer to the question “How Paytm earns money” is what we will learn next in detail. The business model of Paytm is one of India’s leading digital payment options. However, how is it unique? Let’s dive into the same:

  • The two-sided business ecosystem model of Paytm makes people want to invest more in e-commerce. Further, it benefits both the consumers and the merchants at the same time. Also,  Paytm gives customers access to financial services through its financial partners by taking maximum advantage of the technology.  Click here to see OYO’s business model.
  • When it comes to Paytm, consumers can make peer-to-peer money transfers, online payments, and in-store payments. Further, it also provides financial services and Paytm mall apart from ticket booking services. 
  • Now, regarding the benefits of Paytm for businesses, both online and offline businesses can accept consumer payments. Further, it also makes the work of business merchants easy by providing services like payouts, POS billing software, advertising, and more. 

paytm business model unique

  • Paytm also provides loan and insurance services to merchants and covers every aspect of money. Moreover, they also provide API services that help Paytm to handle fraudsters. 
  • But how Paytm earns money or, instead, its revenue? It gets revenue from two revenue lines, namely payment, financial & commerce, and cloud services. They mainly get revenue from transaction fees they charge for their customers, convenience, and recurring subscription fees. 
  • The digital gold feature of the money payment & transfer app is another way the Paytm app earns money or revenue. Further, its partnership with MMTC-PAMP has helped its users to buy their gold at minimal rates. Moreover, they also encourage their customers to open their Gold bank accounts through Paytm. 
  • Another way Paytm earns money is through its e-commerce vertical. They have encouraged many people to indulge in e-commerce or other online purchases with Paytm. Further, it has diversified the online payment/transaction by introducing the Paytm Mall feature. And it has been testing the group buying feature called the Paytm Bang, from which they can earn more money with each group transaction. 
  • Regarding the cloud services of Paytm, the digital payment platform charges merchants and businesses with the total volume of activity on the platforms. Further, as of 2021, 25% of the revenue of Paytm constitutes cloud and commerce services. 
  • As part of Paytm’s IPO, they launched in November 2021 by raising around Rs 18300 – Rs 1,50,000 crores valuations. Moreover, it became the largest IPO in India.  
  • The Future aim of Paytm is to expand the platform simultaneously to the customers’ position. Moreover, it wants to become a super-app in the future. And it has already begun its journey towards the same by providing almost everything in the financial space from the consumer and business merchant’s point of view. 
  • Hence, Paytm has become one of India’s leading UPI payment apps with its realistic business model and success. Moreover, with e-commerce websites, including schemes like buy-now-pay-later, Paytm can earn money like a slice of the pie. 

See Also: What is Business Planning Objectives?

What’s in store for Paytm in the future?

The future of Paytm is something that we can witness now. With the two-sided business model and empowering & comprehensive payment services like Card payment, net banking, wallets, mobile recharge, and more, Paytm has helped create a robust financial ecosystem. And in this ecosystem, we can do payments/ transactions through Paytm and third-party apps using QR codes and devices.

what's in store for paytm in the future.

Further, it helps its business merchants to grow by providing different services like ticket selling, loyalty solutions, and more. Further, they also provide cloud and software services to different enterprises. Thus this is how Paytm earns its money or revenue. 

As a result, in the financial year 2022, the value of loans grew to around Rs 7263 cr, which was Rs 1409 cr during the financial year 2021. So, there has been a positive rise in its brand and service value every year. Furthermore, the upsell revenues have increased as well. 

See Also: A Complete SWOT Analysis Of Swiggy


From where does Paytm generate its revenue?

Paytm earns its revenues by charging transaction fees for merchants and convenient fees for consumers.

What model does Paytm follows?

Paytm follows a two-sided business ecosystem model that benefits both merchants and consumers.

What is the primary source of revenue for Paytm?

The commission earned from the transaction fees for merchants and convenience fees charged from customers is the primary source of revenue for Paytm.

What are the two revenue lines of Paytm?

Payment & Financial and commerce & cloud services are the two major revenue lines of Paytm.


Overall, Paytm is one of India’s growing digital financial platforms that has made its mark in the Indian e-commerce financial and service sector. Furthermore, the company’s success can be solely credited to its strong and successful business model. 

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Kaushal Malkan More posts by Kaushal Malkan