Key Data

• Trading Name: Paytm
• Legal Entities: Paytm Payments Services Limited
  
• Activities: digital wallet provider
  
• Location: India
• Regulations: regulated
• Key People: Vijay Shekhar Sharma

Overview: Paytm, headquartered in Noida, Uttar Pradesh, India, is an Indian e-commerce payment system and financial technology company. It was founded by Vijay Shekhar Sharma, who initially invested $2 million. Paytm commenced operations in the adjacent region to India’s capital, New Delhi, starting as a prepaid mobile and DTH recharge platform. Over the years, it expanded its services to include data card, postpaid mobile, and landline bill payments.

Key Financial Information:

• Initial Investment: $2 million by founder Vijay Shekhar Sharma.
• Valuation (January 2018): Paytm valued at US$10 billion.

Offering:

• Available in 11 Indian languages, Paytm offers diverse online services, including cell phone recharges, electricity bill payments, travel, movie and event bookings, and in-store payments.
• Accepted at various establishments such as grocery stores, fruit and vegetable stores, restaurants, parking lots, toll booths, pharmacies, and educational institutions, utilizing the Paytm QR code.

Legal Matters:

• PayPal filed a complaint against Paytm with the Indian Trademark Office on November 18, 2016, citing similarities in the color combination of logos.
• Paytm resolved the trademark dispute with PayPal.

Compliance Issues

India’s banking regulator, the Reserve Bank of India (RBI), has suspended significant parts of digital payment giant Paytm’s business, citing persistent non-compliance and supervisory concerns. The decision followed warnings to Paytm about questionable dealings between its popular payments app and its less-known banking arm. A technical audit revealed problematic money and data flows between Paytm Payments Bank Ltd. and the broader Paytm universe, causing accounting and supervisory challenges. The regulator expressed worry about management overlap, with the same set of officers overseeing both the bank and the fintech company, raising potential conflicts of interest. Paytm’s shares plunged 20%, and the RBI ordered the bank arm to halt operations after February 29. The move poses a significant setback for Paytm and its charismatic founder, Vijay Shekhar Sharma, as they seek sustained profitability and attempt to address regulatory concerns. The company plans to appeal the decision but faces a challenging road ahead to restore regulatory trust.

Conclusion:

Due to the regulatory problems with the RBI we rate them on Red.

Update 13. June