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One97 Communications Limited
Paytm runs a popular mobile payments app in India and also sells loans, insurance, and business tools to consumers and small merchants.
Paytm is the app millions of Indians open to pay for groceries, recharge a phone, or scan a QR code at a tea stall. It started life as a way to top up prepaid mobile phones, then grew into a full payments platform. Today its main job is moving money: it runs a consumer wallet and a payment network that shops use to accept digital payments, and it takes a small cut from the merchant side of many of those transactions. Think of it as the friendly front door to India's digital money system for ordinary people.
The company is not just a payments pipe, though. It makes a large share of its money by helping its users and merchants borrow. Paytm works with banks and lending partners to offer small personal loans, merchant loans, and buy-now-pay-later credit, and it earns fees for finding and serving the borrowers. It also sells insurance, mutual funds, and other financial products, plus marketing and advertising to businesses that want to reach its huge user base. So the real business is a bundle: payments bring people in, and financial services make the profit. Paytm is headquartered in Noida, near Delhi, and listed on the National Stock Exchange. Its scale is huge but its economics are tough, because payment processing is a low-margin, high-volume game and rivals like PhonePe and Google-backed Google Pay fight hard for the same users. The company has also had to navigate tight regulation from India's central bank, including restrictions on its payments bank that forced it to rebuild parts of its business. Those rules matter enormously, because they can change what Paytm is allowed to sell overnight.
The big question for investors is whether Paytm can turn its giant user base into steady, profitable lending and financial services rather than just a free payments habit. It has been pushing to grow merchant lending and to cut costs, and its path to profit depends on that mix. It is a very Indian story: a startup that rode a national push toward digital payments, and now has to prove it can make real money from the customers it won.
Saved answer · last researched 11 Nov 2026
BIG PICTURE
Paytm's merchant business drives 85% of its payment volume
- 85% Payments from merchants
- 15% Payments from consumers and others
Most of the money moving through Paytm comes from shops and small businesses, not from people splitting dinner bills. The company says 85% of its gross merchandise value, the total value of payments processed, comes from merchants. That matters because Paytm earns fees from lending, subscriptions and tools sold to those merchants, and consumer payments on India's UPI network are largely free. Source: BofA Global Research via ANI News, data from 2026
Timeline
Vijay Shekhar Sharma Starts One97
Vijay Shekhar Sharma had already sold one company, XS Corps, and was looking for the next thing. In the early 2000s he started One97 Communications with a simple bet: there was no real way to make money from the internet yet, so he would put content like live astrology on SMS and sell it through telecom operators. In a country where most phones could not browse the web, a text message was the internet.
Paytm Starts as a Recharge Service
By late 2009, One97 wanted something more than selling content to telecom companies. It started Paytm as its consumer arm, a service for prepaid mobile recharges and bill payments. The idea was to build a name that ordinary people would know, on top of the quiet behind-the-scenes content business.
One97 Becomes a Public Limited Company
The company changed its legal form and dropped "Private" from its name, becoming One97 Communications Limited. It was a paperwork change, but it set the company up to raise money from outside investors and, one day, the public.
Paytm Launches the Wallet
In 2014, just as city Indians were beginning to shop online, Paytm launched a digital wallet. You could load money into it and spend it on recharges, bills and later a marketplace. That simple tool became the front door through which customers entered Paytm, and it marked the company's move from a feature-phone content business to a smartphone payments business.
RBI Grants Paytm Payments Bank Licence
Paytm got a licence from the RBI to run a payments bank, and it also rolled out FASTag across India. The licence pushed Paytm beyond payments and into savings and current accounts, meaning it was now in consumer banking and financial services, a much bigger and more regulated world.
India's Largest IPO
In 2021, One97 raised an Rs 18,300-crore public issue, the biggest IPO in Indian stock market history at the time, with shares offered at Rs 2,150 each. Most of the money went to existing investors cashing out, not into the company, and the company was still losing money. Investors were being asked to buy a loss-making business at a record price and at the top of its range.
The Stock Crashes on Listing Day
On listing day the stock fell 27%, one of the worst opening days for a major tech listing. Investors had rejected the record price and the losses behind it. The stock kept sliding, at one point down about 75% from the issue price, as the market changed its mind about what fast-growing, unprofitable companies were worth.
RBI Shuts Down Paytm Payments Bank
In January 2024, the RBI ordered Paytm Payments Bank to stop accepting fresh deposits, top-ups and credit transactions, citing supervisory concerns and persistent non-compliance. The stock lost roughly half its value in three trading sessions. The bank wound down its core functions, and the RBI later cancelled its licence for good.
Paytm Separates from Its Bank
After the RBI action, One97 separated its core operations from Paytm Payments Bank and moved UPI onto a multi-bank model, working with Axis Bank, HDFC Bank, SBI and Yes Bank as a third-party application provider. That separation limited the damage: analysts said the core payments and financial services business kept running without disruption, and the decoupling is credited with shielding Paytm and enabling its recovery.
Paytm Sells Assets and Nears Breakeven
Paytm got clearance to resume onboarding new UPI users in October 2024, and it raised real cash by selling its entertainment ticketing business to Eternal for about Rs 2,048 crore and exiting its PayPay Japan stake for about Rs 2,364 crore. Losses narrowed quarter after quarter through FY25, and by the last quarter the company was close to breakeven. It had survived what could have been a terminal regulatory event and was rebuilding, though still below its IPO price.
Paytm Reports Its First Profitable Year
In FY26, Paytm reported its first full year of profit, with profit after tax of Rs 552 crore versus a loss of Rs 663 crore a year earlier. Management says most of its profits now come from the merchant business, and it is investing in AI-led capabilities and international expansion. The question of whether Paytm can make money is finally behind it, and the business model is now compounding.