Paytm — What I Think
Paytm bet that India would copy China. India copied the idea and rejected the moat.
I grew up in Delhi watching this happen in real time. Vijay Shekhar Sharma understood something most Indian founders missed for a decade: a billion people were about to come online via cheap phones, with no card, no comfortable banking relationship, and they’d transact in tiny amounts constantly. Mobile recharges. Bus tickets. A ten-rupee top-up. That long tail of micro-payments was the entire market, and Paytm got there first, building the wallet habit before anyone believed Indians would keep money on a phone.
Then November 2016 happened. Demonetisation, overnight, 86% of the country’s cash voided. For Paytm it was a once-in-history tailwind. Every paan shop and vegetable cart put up a Paytm QR because there was no cash to take. “Paytm karo” became a verb. For a moment it looked exactly like Alipay’s coronation.
But here’s the thing they got wrong, and it wasn’t even their fault, it was bigger than them. India decided the rails should be public. UPI made bank-to-bank transfer free, instant, interoperable, owned by no one. The Chinese playbook depended on the wallet being a walled garden you couldn’t leave. UPI bulldozed the garden walls. Money in a Paytm wallet was a liability. Money moving over UPI was just water. Suddenly the wallet, Paytm’s whole wedge, was a worse product than the open network. PhonePe and Google Pay, who built natively on UPI instead of defending a wallet, ate the lunch.
Paytm’s deeper error was breadth as identity. It tried to be commerce, payments, banking, gaming, ticketing, broking, a super-app, in a market that had just made the super-app’s core monetization structurally impossible. China’s super-apps were built on proprietary rails. You cannot build a walled super-app on top of a public utility. The vision was a Chinese answer to an Indian question.
What they got right endures: they convinced a cash-only civilization to trust a screen with money. That unlock is real and permanent, and a lot of what UPI harvested, Paytm planted.
Favorite & worst CEO
- On its leadership: Vijay Shekhar Sharma. Easily one of the most important founders India has produced. A non-elite, self-made builder who saw the mobile-payments wave years early and dragged a cash economy onto phones through sheer will. I deeply connect with the outsider energy and the timing instinct. Where I diverge: he kept running the Alipay playbook after UPI had structurally killed it, defending a wallet moat the country had decided to make public. Visionary on the demand, a beat slow on the rails. Right about the wave, wrong about whose ocean it was.
Part of “What I Think About the Top 50 Fintech Companies of All Time.” I’m Prajjwal Chittori. prajjwalchittori.com.