SUMMARY
The company will now offer cashbacks when customers pay using Paytm at kirana stores
Paytm hopes to bring 20 Mn retail merchants under this cashback offer plan.
Customers at Paytm merchants will earn cashbacks on their daily purchases
Fintech company Paytm has announced that it is shifting its cashback offers from peer-to-peer Unified Payments Interface (UPI) transactions to offline merchant partners for payments at retail kirana stores. The move is aimed at making it more attractive for those customers who still prefer using cash for shopping but are already availing Paytm cashback on individual transactions such as sending money to other users.
The company is looking to partner with over 20 Mn retail kirana stores, enabling them to accept all digital payments options UPI, Paytm Wallet and debit or credit cards. While customers are well-versed with cashbacks on UPI transactions between individuals, Paytm is hoping to build a cashless habit among these customers for payments in physical retail stores.
In fact, Paytm claims that UPI payments for individuals have become more popular due to Paytm cashbacks, but this often results in customers trying to game the system by making multiple transactions just to earn the cashback. The company said this is detrimental to a cashless economy and bringing cashbacks to retail outlets will make transactions more meaningful again.
Boosting Paytm Usage Through Cashback
To boost the capacity of merchants to get better access to capital and have financial security, Paytm says it would invest in lending and insurance, rather than on P2P payments, in addition to boosting the Paytm cashback platform for offline use. The company claimed to have processed over 5 billion transactions in 2018-19, with 12 Mn merchant partners accepting payments through Paytm QR.
“Paytm will be investing money in offline merchant expansion instead of driving incentive-led P2P transactions. Our offline merchants create high-frequency usage and an important use-case for Paytm consumers. By investing in real merchant payments even in the remotest part of our country, we will help expand the vision of Digital India to the grassroots.” said Deepak Abbot, senior vice president, Paytm.
One of the objectives of Paytm’s move is to bring Tier 4 and Tier 5 cities as well as semi-urban locations under its umbrella. The company says the cashback move is primarily aimed at those who have not yet embraced digital payments such as UPI or cards when buying groceries and other essentials. While discounts and cashbacks seem to have worked very well in ecommerce and online payments, it remains to be seen whether small discounts indeed to drive more digital payments at Kirana stores.
According to reports earlier this year, Google is also testing a service to let users transfer money and make payments using UPI even while purchasing offline. The rollout of the product is likely to happen over the next few months.
