Faced with regulatory changes impacting its small-ticket loan business, Paytm, the leading Indian fintech company, is charting a course for operational profitability within the next year. In an interview with Bloomberg, Paytm’s founder and CEO, Vijay Shekhar Sharma, outlined the company’s strategy, emphasizing the expansion of its online wealth management services, a surge in merchant onboarding, and significant cost reductions through artificial intelligence (AI) automation.
To fortify its merchant network, Paytm plans to hire over 50,000 salespeople, targeting a milestone of 50 million merchants on its platform by the end of the year. This ambitious goal aligns with Paytm’s commitment to serving India’s small businesses and merchants effectively.
The company recently faced a setback when the Reserve Bank of India tightened regulations on unsecured loans, prompting Paytm to scale down its small-ticket loans below INR 50,000. Despite this, Paytm remains resilient by redirecting focus towards the merchant and personal loan business, mitigating the impact of the regulatory changes.
Vijay Shekhar Sharma acknowledged the challenges but expressed confidence in Paytm’s ability to adapt and serve its user base effectively. Following the adjustments in its loan disbursal business, Paytm experienced a decline in its share price, hitting a seven-month low. However, with strategic shifts and renewed focus, the shares have rebounded, currently trading slightly over 15% higher.
In addition to its core payments business, Paytm operates the wealth management platform Paytm Money. Sharma emphasized plans to amplify efforts in this segment, leveraging AI to enhance the platform’s capabilities. The company sees an increasing trend in India’s middle class turning to online platforms for capital market investments.
Furthermore, Paytm aims to optimize operational costs through AI-driven automation, targeting a 10% to 15% reduction in employee costs. Sharma noted that AI has exceeded expectations in delivering efficiencies, contributing to the company’s overall cost-saving strategy.
This strategic realignment comes amid heightened competition in the fintech space, with new entrants like Jio Financial Services and existing players like PhonePe diversifying their offerings. Paytm remains focused on innovation, diversification, and efficiency to maintain its leadership position in the evolving financial technology landscape.
