Paytm PB aftershocks: Fintechs step up customer outreach with target ads

Amid regulatory scrutiny and growing uncertainty surrounding Paytm’s business, competitors are seizing the opportunity to attract more customers. Financial technology (fintech) players have intensified their market outreach efforts.

Consider Razorpay, which is currently offering point-of-sale (PoS) devices and soundboxes with no upfront costs or rental fees for three months, valid until March 31 this year. The company said that rentals for its PoS machines start at Rs 299.

While Paytm remains the leading player in the PoS segment, competition is heating up.

As of December 2023, Paytm had approximately 10.6 million merchant subscriptions, increasing by 490,000 on a year-on-year basis. In the third quarter of 2023-24, the company deployed 1.4 million soundbox and PoS devices.

Meanwhile, fintech major BharatPe has announced a free quick-response (QR) code for its merchants along with an instant settlement process. Merchants earn a flat amount of Rs 300 when they order a BharatPe QR code.

According to a source close to the company, BharatPe has witnessed a 100 per cent increase in merchant sign-ups across Tier-I, Tier-II, and Tier-III towns and cities nationwide. Merchant sign-ups across metros saw a month-on-month growth rate of over 104 per cent.

Similarly, Airtel Payments Bank, the payment banking arm of Bharti Airtel, has advertised offering up to 7 per cent interest per annum on a minimum balance of Rs 1 lakh to its users. The company is enticing customers with a zero-balance savings account for a safe daily transaction experience.

Meanwhile, Cashfree Payments, which received final approval from the Reserve Bank of India (RBI) to operate as a payment aggregator in December of last year, said that it anticipates a threefold increase in monthly payment volume within the next 12 months. The company is encouraging the onboarding of merchants with new initiatives.

“To support large volumes of demand and create a seamless experience for merchants, we have launched our Accelerated Onboarding Programme, which offers merchants fast-tracked access to our premium payment collection suite. The programme includes zero payment gateway charges for three months, free same-day settlements for three months, and free access to flowWise, our advanced orchestration solution for one month,” a spokesperson for Cashfree Payments said.

The efforts to incentivise merchant or user sign-ups by major fintech companies come in the wake of the RBI instructing Paytm Payments Bank to restrict most of its businesses, including deposits, by February 29.

On January 31, the regulator declared that no further deposits, credit transactions, or top-ups would be allowed in customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Card cards, etc, after February 29, 2024, except for any interest, cashback, or refunds that may be credited at any time.

Some of Paytm Payments Bank’s merchants and users are reconsidering their decision to stay with the company after the RBI’s restrictions on the platform, Business Standard reported this month.

Companies are actively seeking to absorb customers by expanding their market share in an environment where Paytm Payments Bank has over 300 million wallets and 30 million bank accounts.

Players such as MobiKwik and Airtel Payments Bank are also increasing their salesforce teams, aiming to more than double their on-ground salesforce to target customers and merchants.

To put things in perspective, Paytm currently boasts a salesforce of over 30,000 employees. This team is now ensuring that sufficient service is provided to its merchants, according to the company’s executives.

While the RBI has clarified that its notification impacts only Paytm Payments Bank, many believe this will have repercussions on other businesses as well.