December 29, 2016 12:00 pm JST

Paytm founder helps Indians go cashless

Vijay Shekhar Sharma turns India's 'demonetization' into gold

ROSEMARY MARANDI, Nikkei staff writer

Paytm founder Vijay Shekhar Sharma (Photo by Yuji Kuronuma)

MUMBAI On the night of Nov. 8, trillions of rupees in high-denomination currency notes were suddenly declared worthless, or "demonetized," by the Indian government. But that shock did not wipe away the characteristic grin of one entrepreneur. If anything, it made him smile wider.

Vijay Shekhar Sharma, creator of Paytm, one of India's most successful financial technology startups, had struggled to persuade investors to put money into his electronic wallet venture. But demonetization has accelerated his company's growth in a way he could never have imagined.

Over the next two days, as panic-stricken Indians lined up outside banks to exchange their cash, newspaper front pages featured advertisements proclaiming, beneath a photo of Prime Minister Narendra Modi, "ATM nahin, Paytm Karo." Literally, "Not ATM, but do Paytm."

Sharma was in China at the time, meeting Jack Ma Yun. The founder of Alibaba Group Holding is an investor in Paytm. Sharma giddily recalled Ma's encouragement: "This is the time to go aggressive. Sign up everybody, don't stop."

Paytm, owned by Sharma's One97 Communications, began handling payments within a matter of days at India's neighborhood kirana grocery stores, the smallest of vegetable vendors and highway toll booths. Paytm's QR code stickers show they are part of the network.

"With demonetization, the air was suddenly sucked out of the system," said Sharma, a 38-year-old engineering graduate. While the government saw withdrawal of the large notes as a move against the black market and corruption, Paytm saw it as a spur to digitization.

A little over a month later, the company was processing 6.5 million transactions a day, nearly three times its earlier total, and adding 60,000 to 70,000 merchants a day to its platform. The company will soon increase its workforce by 20,000 from the current 11,000, Sharma said.

"The goal is to bring 500 million Indians on the Paytm platform by 2020," he said. "We see that happening now at accelerated pace and ... if it continues for a year, we will add another 150 million to 160 million customers and some more, then we are sorted."

SMALL TOWN BOY Sharma has never shied away from challenges. His journey took him from Aligarh, a small town in northern India, to a competitive English-speaking college, on his way to becoming one of the most sought-after entrepreneurs in the country.

An extremely bright student, Sharma passed his higher secondary exams at the age of 14, compared with 17 for most students. But he found it difficult to keep up with his class at the Delhi College of Engineering. The classes were in English, which he neither spoke nor understood.

He spent most of his time in the college's computer center. By the time he graduated, he had built his own content-management company, indiasite.net. Sharma had hoped to make enough money from the business to go to Stanford University in the U.S., but in the end he sold the business only to start another.

Sharma, a fan of the British rock band Coldplay, still has big ambitions. Next year, the company plans to move into financial services with the launch of Payments Bank, a business in which Sharma has personally invested 1.12 billion rupees ($16.5 million). It will open its first branch in One97's office in Noida.

His ambition is to create a new type of transaction-driven bank, rather than relying on transforming deposits into risky assets. He wants to be remembered as "the man who changed the status quo of the country," he said, bringing about a change that had taken "generations to happen."

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