Paytm said that it will be investing Rs 600 crore this year to acquire 10 million merchants in over 650 districts. The company is investing in scaling up manpower, technology, and merchant education so they can transact digitally for the first time. Paytm will be using its QR code-based payment solution to bring these merchants on digital payment platforms.
“We will invest Rs 600 crore this calendar year, which will be used for scaling up merchant acquisition teams, marketing and cash-backs,” Kiran Vasireddy, senior vice president at the company said in a note.
The announcement comes shortly after card networks Visa, MasterCard, RuPay and American Express which launched the BharatQR which will offer an inter-operable QR code system. Wallets and the UPI are not a part of the payment system yet. Wallets’ QR code systems, such as Paytm’s, are a closed systems and work only between the wallet users.
Paytm’s QR code payment solution is being used at more than 5 million merchants today. It received a huge fillip following the demonetization of Rs 500 and Rs 1000 notes in November 2016. The QR Code payments contribute to around 65% of overall transactions on its platform.
Earlier this month, the company said it would be extending the zero percent fee to transfer money to bank accounts to all customers and merchants. Typically, Paytm charges a fee to transfer money to bank accounts. It charges 1% for customers and merchants who have completed their KYC and 4% if they have not completed their KYC.
Last week, the Reserve Bank of India (RBI) proposed new slabs for debit card merchant discount rate (MDR) banks will be allowed to charge merchants. It proposed differentiated MDR between acquiring infrastructure involving physical terminals (POS machines, mPOS etc) and digital acceptance infrastructure models (such as QR codes). QR codes payment through cards would attract a fee of 0.3% to 0.85% for merchants. MDR is an inter-bank exchange fee that banks charge for enabling digital transactions.