Paytm has been running from pillar to post following RBI’s curbs on Paytm Payments Bank, issuing press releases, meeting RBI representatives, and even approaching the nation’s finance minister, but it appears that a large fraction of its users have already drifted away from its platform.
Around 42% of local neighbourhood grocers that had been using Paytm have switched to other payment apps following RBI’s orders, a study by Kirana Club has found. Another 20% kirana stores plan to switch away from Paytm in the near future. Kirana club app is an app that connects kirana stores and has 18 lakh stores on its platform.
“Our recent survey indicates that kirana stores across states have already started using or plan to use payment apps other than Paytm to ensure smooth business operations,” Kirana Club founder Anshul Gupta said.
Of the retailers who have started using or are planning to use apps other than Paytm, 50% prefer PhonePe, followed by 30% who preferred Google Pay, and 10% who were inclined towards BharatPe.
The Kirana Club survey corroborates with app download data. Since RBI had imposed its curbs on Paytm Payments Bank, Paytm has seen its app downloads fall 20%. Over the same period, PhonePe saw its weekly downloads rise by 76 percent, while Google Pay’s weekly downloads rose by 52 percent.
For their part, rival payment firms are looking to accelerate the migration of users away from Paytm. Google Pay had sent its users a notification asking them to migrate their bank accounts to its platform. PhonePe had run full-page newspaper ads highlighting its services, tell users “Business runs best when it runs on PhonePe”. Trade bodies too are causing this migration — last week, traders’ body Confederation of All India Traders (CAIT) issued a cautionary advisory to traders to switch from Paytm to other payment options, urging them to make informed decisions and mitigate any potential adverse effects on their financial operations.
All this has meant that over 40 percent of Paytm’s kirana merchant base has migrated away in the course of less than a week. Paytm had assiduously cultivated these users, and spent millions of dollars to acquire them — Paytm had been the pioneer in the digital payments space, and had a massive role in creating the entire industry. But nearly a decade later, non-compliance by its Payments Bank has meant that RBI has all but shut its operations, and Paytm is bleeding users to rivals who’d entered the space years later. Winning and losing is a part of running a business, but having to squander away such a large portion of its users nearly overnight must feel like a particularly cruel blow for India’s payments pioneer.