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How Paytm became a financial services powerhouse from a mobile wallet firm

Paytm, which was one of the first and now largest mobile wallet companies in India, has become a comprehensive financial services platform, thanks to its diversification strategy.

While Paytm has a huge wallet base, the wallet business doesn't make money, but its huge user base has helped it become a platform for other payment modes, be it UPI, wallets, or cards.

The company claims to have 325 million registered wallets but does not reveal how many active users there are on its platform. The user base is more than 200 million active UPI handles built in the country.

Now, the company has set out to use the platform to sell multiple financial services, such as digital gold, mutual funds, insurance, business, and consumer loans.

Expanding Footprint

Late last month, the company`s payment gateway company won a tender from Life Insurance Corporation (LIC) to manage the insurance giant's digital payments. The public sector insurance giant has recorded more than 80 million payments and premiums of Rs 60 crore.

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Payments digitally last year, which is likely to grow exponentially every year. LIC has been looking for a fintech player who can execute payments through platforms such as wallets, UPI, and card payments with a high success rate, as Paytm processes more than 750 million transactions per month on average and has clients like Indian Railway Catering and Tourism Corporation (IRCTC), Uber, Zomato and others. In 2015, it revealed more use cases such as education fees, metro recharging, electricity, and gas, paying water bills, and started operating the payment gateway for Indian Railways.

On the highway

Paytm also owns the largest FASTag business. Paytm Payments Bank (PPBL) is the largest issuer of FASTags and has sold more than 9 million electronic toll tags. PPBL has a large number of business clients and also acts as one of the leading payment service providers (PSP) for UPI clients on its platform. It claims to have more than 64 million bank accounts with deposits of more than Rs 3200 crore and 960 million transactions.

The company has a Large Enterprise Bill Payment System (EBPS), which provides a single panel for businesses and SMEs to pay all their utility bills on one platform. Paytm's EBPS was expected to close the latest range with a transaction value of Rs 3,000 crore. It also has a BBPOU (Bharat Bill Payment Operational Unit) division, which helps utility companies such as state electrical boards to pay bills online.

In many of these sectors, the company competes with BillDesk, PayU, and Razorpay, among others.

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