Alibaba-backed digital payment firm Paytm has announced to shift its focus to offline merchant payments from incentive-led peer-to-peer (P2P ) UPI payments.
The payment firm will now invest money in offline merchant expansion, for which it claims to have high-frequency usage. It plans to partner over 20 million kirana stores enabling them to accept the digital mode of payments including UPI, wallets and cards.
The move is part of the next growth strategy, where Paytm eyes to reach out to smaller cities and villages.
By investing in real merchant payments even in the remotest part of our country, we will help expand the vision of Digital India to the grassroots.” said Deepak Abbot, senior vice president of Paytm in a press statement.
The Noida-based firm, by cutting cashback on P2P payments, believes that Paytm users, who have been using the app for long now do not need cashback push to keep transacting on the platform. Instead, cashback will be given to those who are not yet part of digital payments, the company said.
The move will further also help weed out artificial transactions on the platform. Besides, it also plans to invest in lending and insurance to help merchants get better access to capital and provide more financial security.
In May, it claimed to clocked over 70 million of the estimated 120 million UPI-based merchant transactions. With about a 10% MoM growth in this segment, it has claimed to have 60% of UPI-based merchant payments market share.
In FY 19 Paytm clocked about 5.5 billion transactions. The payment major aims to cross over 12 billion transactions in the next 18 months.
In offline merchants base segment, PhonePe, which has about 1 million offline merchants, competes against Paytm. Google Pay has also piloted the offline payment service with kirana stores.