Understanding the product

Paytm is an app that lets you leave your wallet at home. With Paytm, you can pay for anything just by using your smartphone. It's like having all your money and cards inside your phone, so you don't have to carry them around.

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But that's not all! You can buy movie tickets, book a train or aeroplane ride, and even pay for your family's electricity or water bills on one app.

Paytm was founded in 2010 by Vijay Shekhar Sharma.

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Offerings

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Paytm for consumers

Paytm for Business

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• App Ratings:

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-Google Playstore: 4.4

-App Store: 4.7

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What is the core value prop of Paytm?

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Paytm's core value prop lies in its ability to provide all the solutions to an individual's financial and utility needs at the click of a button. This includes

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✅ Send money to anyone at no extra cost

✅ Transfer money from different bank accounts

✅ Pay for bills (Electricity, gas, water, broadband etc.)

✅ Mobile recharge

✅ Fastag service and recharge

✅ Book travel

✅ Buy stocks

✅ Get insurance

✅ Avail personal loan

✅ Pay for subscriptions

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You don't need any other app when you have Paytm with you. It will give timely reminders of bill deadlines or you can just setup auto-pay on Paytm to deal with it.

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Moreover, one of the main USPs of Paytm was its fast completion of payments to anyone without failure. This was a big headache for users and Paytm provided the appropriate solutions.

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How do users currently experience that core value prop repeatedly?

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Core: When they pay someone it is completed seamlessly and in no time without any hiccups and a long wait time.

Here, without any hiccups is extremely crucial as it is still one of the primary reasons why one switches payment apps. If the user fails to experience this, the likelihood of him experiencing the below-mentioned core value prop reduces drastically.

Users experiencing core value for Paytm's different offerings:

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Before defining the natural frequency it is important to understand the users of Paytm!

let's look at the users:

(User research is elaborated in detail in the segmentation section)​

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​What is the natural frequency of your product?​

• For Paytm, the natural frequency would be daily or multiple times a week.

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-Casual users: 1-2 times a month

-Core users: 7-8 times a week

-Power users: 8-10 times a week

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Do you have other sub-products? What is the Natural frequency like?​

• Yes, apart from enabling users to make digital payments, Paytm also offers a bunch of different sub-products

Engagement framework ​

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Reasoning: In Paytm's case, all three levers—depth, breadth, and frequency—are crucial. However, depth and breadth can only be effectively activated when users frequently transact through the platform and depth will possibly be a function of breadth. Trust is essential when dealing with money, and users are unlikely to explore additional services or increase their spending until they regularly use Paytm for necessities. Frequent use builds familiarity and confidence, encouraging users to engage more deeply and broadly with Paytm's offerings.

Therefore,

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-Frequency would be a good engagement metric to work on to convert a Casual user to a Core user.

-Breadth and depth would be appropriate engagement metrics to convert a Core user to a Power user. ​

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Define core E&R metrics

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Action that makes a user an active user

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To be considered an active user on Paytm, there are 4 key actions a user may do:

1. Regularly makes or receives payments using the Paytm platform.
2. Links and pays utility bills (e.g., electricity, water, gas) through Paytm.
3. Sets up automatic payments via a Paytm UPI ID or sets up auto-pay for repetitive expenses.
4. Uses at least one additional Paytm service (recharge, movie, travel etc.) quarterly.

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The natural frequency of active user​

• Casual user - 1 transaction a month
• Core user - 2 transactions per week
• Power user - 2 transactions per week

Customer Segmentation

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Paytm customer base can be divided into 4 different core categories and can be better understood with the diagram below:

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Though Paytm has a wide customer base operating in different areas, the individual user is still holding the key for Paytm and optimising for that would result in the best results

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Segmentation based on Ideal Customer Profiles

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Segmentation based on product usage and frequency

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ICP 1: A tech-savvy individual who has just begun their college journey after finishing school. They might live with their parents, in a hostel, or in a shared flat with friends. They are enthusiastic about exploring new technology and are motivated by cashback and special offers.

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Products used and natural frequency of the same:

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• Revenue generated: Low​

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ICP2: An individual who has recently completed their education and is now employed by an organization. This person lives with their family or independently, and they have bills to pay and basic responsibilities to manage.

Products used and natural frequency of the same:​

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• Revenue generated: Higher than ICP 1 [ High frequency coupled with high transaction amount + more likelihood of this ICP taking a loan]

Segmentation based on Core/Casual/Power users

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Notes and insights from User interviews:

To understand the users better I opted to venture out and talk to as many users as I could and here are some of the insights I got:

-RBI and all the negative talk have deeply impacted how people perceive Paytm. Though the app does not have any control over their bank account and money, it still makes them uncomfortable to use the product.

-The user did not immediately drop off or stop using the app but had reduced interaction and they did explore other apps.

-"Turant payment hojati, Rukna nhi padta" was something that the majority of users asserted. This gives us an indication that the payment success rate is quite crucial.

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-On being asked why you don't use/like payments, there were mixed opinions ranging from competitors giving exactly what the user ( hinting towards UI) to I don't get much cashback to everyone was using this so I just switched.

-Paytm's loyalists were very happy with the services of Paytm Payments Back as they could manage their money in a better manner that was meant for digital payments without exposing their main account to any sort of risk or scam.

-Travel and movies: People genuinely did not care or had any loyalty towards any platform, all they cared about was who gives it for cheaper. Users usually check out 1 to 2 apps before booking tickets.

Engagement Campaigns

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Campaign 1

• Segment: Users who are using Paytm to send and receive payments and merchant payments (Millenials and GenZ)
• Goal of the campaign: Introduce users to all the other features
• Pitch/content:

-Idea: To create an exclusive club on the app that can be entered once the user completes a checklist and will be rewarded massively.

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The checklist would start from an easy step and slowly become tougher.

-Pitch: Congratulations! You can become a Paytm elite (access unlocked)

Complete the exclusive checklist and gain access to the elite Paytm Club. You'll enjoy never-heard-before benefits and rewards that are going to make a lot of people jealous😉

• offer: Complete the checklist and be a part of Paytm's all-exclusive club
• frequency & timing: 12 transactions (of different categories) in 3 months.
• Success metrics: Number of individuals who completed the checklist.

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Campaign 2​

• Segment: Users who are using it for recurring payments but are not spending on experiences
• Goal of the campaign: Increase spending via Paytm
• Pitch/content: ​

Idea- People want new experiences but often are not aware of them or motivated enough. A treasure hunt (City/country-based) solves this by incentivizing their every experience and encouraging them sufficiently to go out and spend. eg. level1: Try Sitaram Diwan Chand's cholae bhature.

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The whole campaign runs ear round and the individual who completes the most activities gets 1crore

Pitch- Explore something new, and we'll give you one crore for it (Saachi) Introducing "Discover Your Country," a year-long treasure hunt designed to uncover hidden gems(even influencers don't know about them🤫) and an extraordinary chance to win one crore if you are the topper in the game!!

• offer: The individual at the top of the leaderboard at the end of the year gets 1 crore.
• frequency & timing: 2 per month (continues for a year)
• Success metrics:

-Number of experiences taken

-Amount spent via the app

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Campaign 3​

• Segment: Users who have multiple bills often miss the deadline and return to the app to pay bills every time.
• Goal of the campaign: To make users setup auto-pay for their bills
• Pitch/content: You lost a biryani last month because you didn't pay...

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You have 7 bills to pay and you've missed the deadline to pay them more than 50% of the time and (Surprise) it cost you 300 in penalties and late fees. Let's not lose another biryani (Zomato confirms) and set up auto pay. We'll handle it for you!

• offer: Setup auto pay and get the lost amount back
• frequency & timing: Once a month
• Success metrics: Percentage of users opting to set up auto-pay for bills.

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​Campaign 4​

• Segment: Male users who are currently using 1 to 3 features
• Goal of the campaign: To increase spending and frequency of male user
• Pitch/content: IPL Tickets are out and here is one for you...

How do you get it? By helping small businesses. Every time you pay them you get closer to meeting Virat Kohli (Check the leaderboard here) for dinner at his favourite restaurant and get IPL tickets.

• offer: Pay local merchants and stand a chance to win IPL tickets
• frequency & timing: 2-3 per week over 3 months
• Success metrics:

-Amount spent via the app

-No. of transactions completed

-No. of merchants paid to

Campaign 5​

• Segment: Users who are currently using Paytm for all the core features
• Goal of the campaign: Introduce them to financial services
• Pitch/content: You are losing money by...

I'm not riding the India growth story. How? XX percentage share grew by XX% whereas the bank gave you XX interest for the same time.

DONT lose more money. Invest now with Paytm Money.

• offer: Open your new and secured demat account for FREE!
• frequency & timing: Once per month
• Success metrics:

-No. of users opening demat account

-Amount invested in stocks and mutual fund

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All the campaigns are designed to increase consumption, i.e.

Retention

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Understanding current retention​

Let's look at some external data to figure out what is Paytm's current retention

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Data set 1:

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Business Standard: The company cornered an 8.4 per cent market share in the UPI applications’ ecosystem in April. The share has come down from 10.8 per cent and 9.13 per cent in February and March, respectively.

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Paytm is still the third largest player in the ecosystem because other players are considerably smaller in comparison to the fintech major.

Transactions volume:

Paytm - 1,117.13 million

Phonepe - 6,500 million (48.8% market)

Google Pay - 5,027.3 million (37.8% market)

IMPORTANT: Both companies have seen their share of UPI transactions inch up after the Reserve Bank of India’s (RBI) action on Paytm’s associate entity Paytm Payments Bank.

Reason for the decline in market share: The company cannot add new users until the existing ones are migrated to a new UPI handle.

Data set 2:

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Via Unified Payments Interface (UPI) Ecosystem Statistics | NPCI

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It can be determined Paytm suffered a 20.98% decline in the number of transactions between December 2023 and May 2024.

1442.58 million UPI transactions in December 2023 to 1140.01 million UPI transactions as of May 2024.

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Therefore, the monthly decline rate is ~4.17%.

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Data set 3:

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Via Paytm_Earnings-Release_INR_Q4_FY24.pdf & Data set 2

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​UPI Transactions:

• March 2023: 1,288.38 million
• June 2023: 1,307.48 million (+1.48%)
• September 2023: 1,451.99 million (+11.07%)
• December 2023: 1,573.61 million (+8.36%)
• January 2024: 1,569.63 million (-0.25%)
• February 2024: 1,405.69 million (-10.44%)
• March 2024: 1,230.04 million (-12.48%)
• April 2024: 1,117.13 million (-9.18%)

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Monthly Transacting Customers:

• March 2023: 9 crore
• June 2023: 9.2 crore (+2.22%)
• September 2023: 9.5 crore (+3.26%)
• December 2023: 10 crore (+5.26%)
• January 2024: 10.4 crore (+4.00%)
• February 2024: 9.6 crore (-7.69%)
• March 2024: 8.9 crore (-7.29%)
• April 2024: 8.0 crore (-10.11%)

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Birds eye view

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**I reached out to a couple of people on LinkedIn but couldn't get the exact numbers, so the above numbers are assumptions based on secondary data.

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likely user retention curve based on the assumption:

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Microscopic view

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Reasons of churn

Dividing the reason for churn into voluntary and voluntary:

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Negative actions to look for​

Resurrection campaigns

Campaign 1​

• Segmentation of user type: Users who switched to another because unfriendly User interface
• Pitch/Content: Paytm belongs to you! Help Us Redesign Your App Experience...

Choose your preferred screen design and get rewarded with a free Paytm First membership. Your Paytm, your choice!

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Example of current vs optional screen

• Offer: Your Paytm. Your choice. Help us and get a Paytm First membership for free!
• Frequency and timing: Key action is required only once. Email/SMS/Push Notification to be sent 3 times a week
• Success metrics:

-Percentage of users who opened the app and picked the screen of their liking in respective communications sent.

-Percentage of users who opted for free Paytm First membership upgrade.

-No. of transactions in the 1st 30 days of resurrection

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​Campaign 2​

• Segmentation of user type: Users who have a bad image of Paytm due to recent compliance troubles
• Pitch/Content: Integrate a strong PR campaign emphasizing security and associating Paytm with India's top trusted brands like Dell, Nike, Sony, Samsung etc featuring trusted personalities such as Amitabh Bachchan, M.S. Dhoni, and Sachin Tendulkar as the faces of Paytm.
• Offer: Get India's most secured and trusted NOW!
• Frequency and timing: To be done over 3 3-month periods during the Indian festive season.
• Success metrics:

-Percentage gain in brand lift

-Percentage of churned power users returning

-Social sentiment

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​Campaign 3​

• Segmentation of user type: Users who have uninstalled the app for some reason
• Pitch/Content: An email campaign

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Sample email:

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Namaskar <User name> ji,

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We noticed you haven't been using Paytm lately. We wanted to take a moment and enjoy our great experiences together, from helping you save <amount> to going out with family and friends or having peace of mind with effortless bill payments.

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We’d love to know what made you stop using Paytm. You are invaluable to us.

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You suffered some issues? click here and Neha will personally get in touch with you.

To welcome you back, we have some exclusive offers lined up for you:

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Get any one of the three offers of your choice <offer option> after making 2 payments, and unlock the remaining two offers after completing 5 payments.

Offers available till <deadline>

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Your well-wisher,
Ranbir/Alia

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• Offer: Get any one of the 3 exclusive offers after making 2 payments and unlock the other 2 offers after completing 5 payments.
• Frequency and timing: 3 emails to be sent a month to a user until the user opens the email and thereafter follow-up emails.
• Success metrics:

-Email open rate

-Click through rate

-Conversion rate

-Percentage of users claiming rewards

-Percentage of users utilising rewards

-Percentage of users' support requests solved.

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Campaign 4​

• Segmentation of user type: Users who've stopped paying bills via Paytm
• Pitch/Content: Your electricity bill is here! We'll pay 10% off it!
• Offer: Get 10% off on your bills when you set up bill auto-pay
• Frequency and timing:

-Push notifications are sent every time a utility bill is generated.

-Followup notification to be sent at deadline minus 3/2/1 day.

• Success metrics:

-Number of users reactivated

-Number of transactions made by reactivated users

-Number of users setting up auto-pay

-App engagement rate

-No. of bills re-linked

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Campaign 5​

• Segmentation of user type: Users who did not find much value in offers and cashback
• Pitch/Content: Paytm food festival

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Join the Paytm Food Festival and enjoy crazy good food at a crazy discount 🤪

• Offer: Get a minimum of 25% cashback whenever you eat out!
• Frequency and timing: Push notification/email/SMS/ads to be sent every weekend - Thursday to Sunday
• Success metrics:

-No. of churned users reactivated

-No. of users joining the food festival

-No. of transactions made and place visited

-Avg. amount of cashback received

-No. of transactions associated in ancillary to the food festival transaction (i.e. cab, metro, fuel etc.)

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