Who is Vijay Shekhar Sharma, the Paytm founder?

The central bank’s order has added to the worries of both customers as well as the digital payment service provider, given the move will have huge implications on the company’s financials. Two days after the RBI announcement, Sharma took to his X account to assure users that the multinational fintech company will continue to work as usual.

“To every Paytmer, Your favourite app is working, will keep working beyond 29 February as usual. I with every Paytm team member salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serve our nation in full compliance. India will keep winning global accolades in payment innovation and inclusion in financial services – with PaytmKaro as the biggest champion of it,” he posted on X on Friday (February 2), assuring all the platform users.

Shekhar also said that Paytm’s owner company, One97 Communications Ltd (OCL), will stop its dependency on Paytm Payments Bank Ltd by shifting its nodal accounts and QR codes to other banks. Nodal account is a special purpose account used for receiving money from participating banks and remitting to specific merchants. 

With share prices of OCL plunging by 20 per cent for two consecutive days since the central bank’s decision, the focus now remains on how Sharma navigates through the crisis, retaining both investors and users’ confidence.

Humble beginnings

Born to a schoolteacher in Uttar Pradesh’s Aligarh, Sharma is one of the examples to what strong determination and continued perseverance can lead up to. Despite his humble early education in a Hindi-medium school, Sharma managed to enroll himself in the prestigious Delhi Technology University (DTU). A strong believer in new age technologies, Sharma’s entrepreneur instinct led him to find indiasite.net, a venture he later sold at $1 million. He later founded Xs! Corporation amid the dot com wave.

He later went on to find Paytm in 2010, which blew up in 2016 following demonetisation, and the call for a cashless economy provided a major boost to the acceptability and profitability of the mobile-based service provider. In 2018, the company received $300 million in funding from Warren Buffet’s Berkshire Hathaway.

Later, with an aim to bring banking and financial services to 500 million Indian customers and expand the company’s area of operation, Sharma launched Paytm Payments Bank in 2019, one of the country’s largest digital bank. Paytm competes against Walmart’s PhonePe and Google Pay in India, allowing users to transfer funds and pay bills.

“All technology companies and start-ups find their commercial modelling after five or seven years. I have a model of 3-3-3 — for three years we try the product market fit, then for three years we try the revenue market fit, and then for three years we try the profitable market fit. We are starting to enter the last leg. Different companies will find their commercial models differently. In our case, merchants pay for accepting payments. So the card machines, the sound box, the software that they use… They pay a subscription for all these things. So we earn our money from that side,” Sharma had said in an interview with The Indian Express in 2021.

Over the years, Paytm went on to report a gross merchandise of Rs 13.2 lakh crore for FY 2022-23. Sharma featured in Forbes’ 2022 list with a net worth of $1.2 billion, even as his worth declined from 2019 peak. The company further aimed to generate free cash flow by the end of 2023.