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Paytm CEO Forecasts Profitability in Under a Year

Paytm app

Paytm is reportedly overhauling its wealth management operations as the FinTech aims to fast-track profitability.

Part of the plan also involves the Indian company hiring more than 15,000 contract salespeople to add more merchants to its network, founder and CEO Vijay Shekhar Sharma told Bloomberg News in an interview posted Wednesday (Dec. 20).

Sharma said the company’s money management product revamp is aimed to attract younger users, who are more comfortable with online investing. Paytm also wants to expand its sales staff to more than 50,000 people to attract more merchants from smaller communities.

Sharma told the news outlet that this new push, combined with cost reduction measures fueled by artificial intelligence (AI) automation, could get the company to profitability within the next year, earlier than past projections.

“We have learned and we will amplify our ability to serve India, its small merchants and businesses,” he said. “We should be crossing about 50 million merchant-base signed up on the Paytm platform in the year.”

The Bloomberg report notes that these initiatives represent a turnaround effort by Paytm, which has fallen 70% since going public two years ago amid competition from rivals like the Walmart-backed PhonePE and regulatory pressure.

For example, the Reserve Bank of India (RBI) — the country’s central bank and banking regulator — announced last month after seeing an uptick in delayed payments that lenders such as Paytm had to change their capital requirements.

RBI Governor Shaktikanta Das has warned banks to avoid “all forms of exuberance.”

Following those changes, Paytm announced it would make fewer smaller loans — those below 50,000 rupees, or $600 — and says it plans to offset this loss by targeting higher ticket loans to consumers and merchants in the above-50,000-rupee category. The decision apparently caused brokers such as JPMorgan, Goldman Sachs and Citi to downgrade the company.

In its efforts to woo younger Indian consumers, Paytm is targeting a demographic that is comfortable making transactions in the digital realm.

Data from the third annual Global Digital Shopping Index, a PYMNTS Intelligence and Cybersource collaboration, shows that digital wallets have become the preferred payment method for 55% of retail purchases in India.

“India’s digital-first approach to shopping is particularly evident among millennials, bridge millennials and Generation Z shoppers,” PYMNTS wrote earlier this month. “These connected consumers use an average of 17 digital shopping and payment features, compared to 15 in the U.S. and 12 in the U.K.”