The LexGaze Weekly - STALWARTS

The man who earned a billion by granting "cashback": Vijay Shekhar Sharma

Vedang Upadhyay

Issue 10 | August 23, 2020

Paytm (the e-commerce payment system) has established itself in the Indian market in quite an astounding manner. So much so, that the company's name has become synonymous with the idea of e-transaction in India, all because of a student from an underprivileged background who chose to become an entrepreneur after graduation. Instead of joining the rat-race with a salary of ₹ 17,000 in the late 1990s, Mr. Vijay Shekhar pillared the foundation of what now has evolved the whole of India. He taught the nation the absolute basics of remote-transaction because of which signs of नौ नगद, न तेरह उधार could be seen in every kiranastore. In a country where the dependency on cash was such that a major chunk of the population didn't even bother opening bank accounts under their names. The scenario was such, mainly, because the crispy currency notes were revered more than the convenient financial instruments. In a nation where debit & credit cards were owned only by the populace employed in the corporate sector, he spurred a method of transaction so contagious that it revolutionized the monetary exchange in India.

Shekhar had completed his schooling by the time he turned 15 but was not allowed to sit for the IIT-JEE entrance examination, owing to his age. He cleared the written rounds of Aligarh University's engineering course but was detained after the interview because of his lack of proficiency in the English language. A year later, he joined the Delhi College of Engineering with an AIR of 47. Once a topper, this country boy began failing in his subjects and shifted to the backbenches of his classroom as he was unable to cope with the medium of education- English.

After realizing that attending lectures was a little short of wholly infructuous, he began spending his hours in computer labs- learning various computer languages. This is how a student from the electronics department became the geekiest tech-savvy of his time, second to none but his idol- Steve Jobs. This whizz-kid had already motioned a start-up (XS Communications) in his penultimate year of college. He devised a dial-extension for Airtel, which was used for various Value-Added Services (VAS) like astrology, jokes, news, etc. Incited by his innate propensity of treading the path only a few ever did, he undertook a loan of ₹ 8 lakhs (compounded annually @ 24%) to establish his own company- "One97". (which later conceived Paytm.)

A far-sighted Vijay could clairvoyance the rise of the internet back in 2010 and, hence, resolved to construct a platform that would cut the cost of swipe machines at the shopkeeper's end and the cost of debit/credit cards at the consumer's end. He wanted to render a possibility where a person could directly "PAY Through Mobile" with the help of just QR codes and contact numbers. (not necessarily to the shopkeeper's bank account) Thus, saving any extra expenses on paraphernalia.

Under his ambitious goal to revolutionize the money transfer, he launched his service of digital transaction under the brand name of 'Paytm' in 2010 by putting $20 million at stake. He couldn't facilitate people to make transfers directly to bank accounts, as he did not have a banking license back then. To make his way around it, he brought in the concept of 'e-wallet'- where people could recharge it like they recharged their SIM cards. Following this, the equivalent amount would get credited to their Paytm wallet. With a tremendous amount of offers (₹10 cashback for every Pepsi bottle purchased, and up to 100% cashback on recharging of SIM cards), he lured the masses into downloading his app and opening Paytm accounts. Such accounts needed no KYC, just a contact number, and an influx of cashback would begin.

Shopkeepers began installing Paytm's scan codes in their shops, as the youth was unbelievably into the fad of hassle-free transactions. Paytm caught the nerve of the Indian tradition where its advertisements displayed guests gifting youngsters- a direct top-up in their Paytm wallet. This became a hit and Shekhar became the youngest Indian to become a billionaire. In January 2017, Paytm was among the only 2 companies to get a banking license. Today Paytm is omnipresent. Sponsoring major events around the country, Paytm has become a big deal. Its customer base has reached even the most underserved areas of the country.

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