Paytm To Invest Rs. 600 Crore To Expand Their QR Code Ecosystem With Sellers!
The Government had planned to increase the adoption of QR(quick response) codes in the later part last year, as it pushed for a cashless economy. QR codes are easier to use, and only require a camera in the phone that is to be used.
Paytm has always had QR codes for payments but they never really got famous because the company also has a phone-to-phone number transaction method which witnessed much higher adoption. Somehow, the company has felt the need to improve the usage of QR codes and is investing Rs. 600 crore to expand this feature. It probably because QR code are easier as the payer or payee does not need to remember or type phone number while making payments. Just scan and pay!
Moving over smartphones, the company will spend this money to build the backend for QR code-based payments to allow seamless and secure transactions at low bandwidth and with low-end smartphones.
The company wants to ensure that the merchants are using this feature as well, and are able to get payments regularly through it. Paytm plans to rake in 1 million offline merchants every month using QR code payment method, by December 2017 in over 650 districts.
Kiran Vasireddy, Senior VP at Paytm, said “Our 0% merchant transaction fee coupled with an aggressive merchant acquisition rate, will help us take QR code-based payments to every nook and corner of this country. We will invest Rs 600 crore this calendar year, which will be used for scaling up merchant acquisition teams, marketing and cash-backs.”
Can Paytm popularise QR codes amongst sellers?
If you go to any merchant right now, using the Paytm app, you will realise that they will display their phone number first, with the code at the bottom so that the buyers can easily add money to their phone number linked account.
During demonetization, it was easier for the company to explain the phone-based payments as compared to the QR code. Unless the buyer knows about this feature, the seller will not explicitly mention the option.
QR codes are still in use in so many applications – WhatsApp uses it for security, Snapchat uses its own version to allow people to add each other, and Google Play Store uses it to link an app to the code. However, these codes never really got the attention they needed.
For Paytm, it is primarily an alternative to ‘tap n pay’ transactions, because the customer scans the code and makes the desired payment. The linking happens quickly in the backend, so the customer doesn’t have to type in anything apart from the amount to be transferred.
As Paytm plans to open its own payments bank, it needed to strengthen the payment options it has, before venturing into new territories and this investment is a sign of their commitment.