Paytm, the mobile wallet and e-commerce start-up, became a household name in the last two months. So much so that it has become a generic term associated with any e-wallet and has become an all-pervasive brand with high recall value. Demonetisation gave a fillip to mobile wallet firms like Paytm helping them gain users at exponential rates every day.
Since the demonetisation drive was announced by Prime Minister Narendra Modi on November 8, Paytm has added new users at unforeseen rates and its trading volume grew by leaps and bounds. But the brand has been facing some critical challenges in terms of transaction glitches, advertising faux pas and even a trademark infringement case against the brand. It is by overcoming these challenges that the digital wallet sector’s market leader, Paytm, can stabilise its brand image and grow at a steady rate.
Let’s take a look at the hurdles Paytm faces:
Focus on advertising at the cost of infrastructure
The leading e-wallet firm has been battling continued transaction problems. Customers trying to load money onto their Paytm wallets have had money deducted from their bank accounts but the credit had not reflected in their Paytm wallets. Users also complained that efforts to transfer money back to their bank accounts were also failing.
The technological backend of Paytm seems to have crumbled under high pressure. “When demonetisation was announced, Paytm could not have anticipated the 1000% jump in users. What a technology company like Paytm should have done at that point was focus on strengthening its backend and creating a robust platform, instead of focussing on advertising,” said N Chandramouli, CEO TRA.
The primary concern during this time has been the alleged non-responsiveness of the Paytm customer care. Paytm users have been trying to reach out to Paytm via Twitter to get their transaction related issues sorted. In return, Paytm has been trying to draw the attention of its users to the various reasons why a transaction might be failing and sharing information on how to contact Paytm’s customer care on Twitter and on the Paytm blog. Paytm’s Twitter profile has been bombarded by messages from distressed uses who are having problems making transactions via Paytm.
Paytm has been struggling to cater to its 170 million users, 20 million of whom join between November 10 and December 20. Harish Bijoor, CEO Harish Bijoor and Consults, said “Much of the time Paytm is in the news it is about the tumult and any tumult is not good for a brand. The image of the brand is closely related to how robust the company is and in the case of Paytm, how prepared it is to bite into the demonetisation pie. Demonetisation was a humongous opportunity for Paytm, and Patym seems to have taken a bigger bite than it can chew. A growth of 200-400% may have been easily digested but 500-600% jump is tough to digest. At crucial points like these a firm must manage its greed.”
In addition, some days ago the Paytm app went missing from the iOS App Store because a recent update of the app was buggy. “By the time we submitted the fix, uploaded it on app store and got it approved from Apple for release, it was late in evening. This is why yesterday, while the debugging and updating was going on, we kept our iOS users logged out to avoid any larger disruption on the platform. With more than 95% users being on android and the website, the disruption was restricted to our iOS users. We do sincerely regret the inconvenience caused by this outage,” Paytm said on their blog.
Suspected Insider Fraud
Adding to this mix of unfortunate incidents, Paytm’s employees are now being investigated by CBI sleuths for defrauding the company itself. It has been reported that based on complaints from Paytm, two cases of fraud amounting to nearly Rs 10 lakh have been registered against 22 private individuals. The police suspect that insiders facilitated the fraud. “What surely influences the brand value of Paytm are the technical glitches and the insider fraud that has come to light,” said Chandramouli.
Controversial Advertising Strategy
Many newspapers across India were splashed with a Paytm ad on the morning of November 9th congratulating Prime Minister Modi for “taking the boldest decision in the financial history of Independent India.” Opposition political parties and politicians criticised Paytm for this ad. From Delhi Chief Minister Arvind Kejriwal and West Bengal Chief Minister Mamata Banerjee, to RJD chief Lalu Prasad Yadav, nobody spared Paytm.
The taunts of “Pay to Modi”, “Pay to Me” are not just smart quips, they dragged Paytm into a political war. “In the case of the newspaper ad and the comments made by the Opposition the brand tends to get coloured - not a secular colour but a party colour. It is possible that some would stay away from the app because of this party connection but that may not be too large a section of the public,” said Bijoor.
Another advertisement from Paytm also faced criticism and this time Patym was pressured into withdrawing the ad and changing the ad. The digital ad ‘Drama Bandh Karo…Paytm Karo’ was seen to be mocking the situation and wasn’t appreciated by viewers. The brand modified the creative by replacing the ‘Drama bandh karo’ tagline with ‘Chinta Mat Karo, Paytm Karo’. Even though Twitterati may have been repulsed by the advertising gimmickry of Paytm its brand image may not have been greatly affected experts said. “The borderline controversial advertising may not adversely affect the brand image of Paytm by a lot. It should be pointed out that the brand did get lost in getting more customers. Customers would have joined in large numbers anyway,” said Chandramouli.
Trademark Infringement Case filed by PayPal
On December 18th another kind of misfortune befell Paytm. US-based e-wallet company, PayPal filed a trademark infringement case against Paytm. In the complaint, PayPal has said that Paytm has no reason to adopt identical colours and colour scheme other than to take advantage of the reputation built by PayPal. The complaint from PayPal came on the last day of the statutory four-month period that follows advertising a logo. Paytm advertised its logo on July 18.
This issue hardly impacts the day to day use of Paytm as a mobile wallet app. But it is a very real issue, said Chandramouli. “The colours are indeed the same! This surely is not a case of a copy-cat brand. What possibly happened was that whoever designed the logo did not put in much thought. Who else would do it so blatantly? It is more of an early start-up syndrome. Paytm must consider changing the colour of its logo if nothing else,” he said.