Paytm on hiring mode to rope in more merchants, sell payment devices

At a time when tech companies are on an overdrive to cut down on manpower, Paytm has chosen to buck the trend. After announcing that it had achieved operational profitability three quarters ahead of schedule, the fintech company plans to beef up its sales team to speed up onboarding of merchants to its platform and deploy its payment devices at shopfronts.

“When we look at the opportunity of 10 crore merchants and we are sitting with 3 crore today, we have a very long way to go. We are present in 400-450 cities and towns and our belief is that over the next 2-3 years, we would like to be in 1,000,” Chief Operating Officer Bhavesh Gupta said in an earnings call on February 6.

“This penetration will be a bit more people-led, but we will calibrate it as we see growth. It will not be on the back of loss-making growth, but on the back of profitable growth,” he said.

Executives on the call, however, mentioned that it won’t be a large addition to its sales force as the company had expanded it substantially a few quarters back.

The company’s earnings presentation to analysts showed that its average number of sales people had grown to 29,569 in the December quarter (Q3), compared to 18,691 a year ago.

Paytm Chief Financial Officer Madhur Deora told analysts that the payback period for sales persons was good, especially when they were deploying devices at shops.

On a year-on-year basis, the number of registered merchants on the platform has risen from 2.49 crore to 3.14 crore in Q3, and devices deployed have jumped almost three-fold from 2 million to 5.8 million.

While the total number of transactions on Paytm rose 79 percent to 763 crore in the December quarter, the number of merchant transactions rose 81 percent to 628 crore.

“There was a war of UPI effectively between different companies. Somebody chose consumer P2P, somebody chose P2M… We chose the merchant business,” said Paytm CEO and founder Vijay Shekhar Sharma.

“Our merchant business revenues are higher than every other peer all because we put attention there. In fact, once NPCI starts declaring acquiring-side market shares, you will see how well placed we are,” he added.

Sharma reiterated during the earnings call that the operating profitability achieved in Q3 was sustainable and the company will look to improve its margins going forward. For the first time in a quarter, Paytm said that its EBITDA before deducting employee stock option (ESOP) cost, a proxy metric that the new-age companies use to define operating profitability, was in the green as it came in at Rs 31 crore in Q3.

Paytm’s revenue rose 41 percent to Rs 2,062 crore in the December quarter (Q3), compared to the year-ago period, while net loss narrowed to Rs 392 crore.