Paytm Transforms Smartphones into Payment Terminals

Paytm announced on Tuesday a new initiative to convert NFC-enabled Android smartphones into functional point-of-sale (POS) machines. This strategic move aims to broaden its merchant network within one of the world’s most rapidly expanding mobile payment ecosystems.

Enabling Card Acceptance via Smartphones

Now, a Paytm merchant partner can activate card acceptance capabilities directly on their NFC-equipped smartphone through the Paytm Business app. Upon activation, transactions can be completed simply by tapping a physical card against the phone.

Supported Networks and Transaction Limits

Paytm Smart POS is compatible with Visa, Mastercard, and Rupay payment networks. A transaction limit of 5,000 Indian rupees (approximately $69) has been established for each individual transaction.

Industry analyses indicate that over 90% of transactions conducted in India are valued at or below $69, justifying this transaction cap.

Addressing the Gap in the Indian Market

Vijay Shekhar Sharma, founder and CEO of Paytm, highlighted a deficiency in the current availability of payment devices for Indian small and medium-sized businesses. He noted that a significant portion of these businesses still operate primarily offline, speaking at a virtual press conference.

Expanding Merchant Solutions

To attract these merchants, Paytm has previously introduced QR codes compatible with multiple payment networks. Additionally, they have developed jukeboxes and other devices to streamline digital payment acceptance for businesses.

Eliminating the Need for Dedicated POS Machines

Sharma stated that this new functionality removes the necessity for merchants to purchase dedicated POS machines, as most contemporary Android smartphones now incorporate NFC technology.

Introducing the Next-Generation Jukebox POS

Paytm also revealed an updated version of its jukebox POS, designed to resemble a QR code placard. Dilip Asbe, head of the payments body NPCI, explained that a key reason for limited adoption of existing POS machines is merchant discomfort with their operation.

Market Leadership and Subscription Fees

Paytm, which processed over 1.2 billion transactions last month and currently holds the leading position in India’s mobile payments market, will implement a modest subscription fee for merchants accessing either of these payment services.

Competitive Landscape

This initiative positions Paytm in direct competition with Pine Labs, a Sequoia Capital-backed company and current market leader in the POS sector, though Pine Labs is a smaller startup overall. It also underscores the aggressive expansion strategies employed by Paytm and other major payment companies to better serve merchants.