The Reserve Bank of India announced that Paytm Payments Bank will cease operations on February 29. This decision caused a wave of panic to sweep across India's thriving Kirana businesses. Many people had grown to associate Paytm's QR code with online payments, but as its abrupt termination approached, Kirana proprietors had to make a critical choice: change or fall behind. With 20% more preparing to do so, over 42% of Kirana stores have already moved from Paytm to Mobikwik, Bharatpe, Phonepe, and GooglePay.
Rise in other Fintech companies
BharatPe has seen a 100% increase in merchant sign-ups throughout tier-1, tier-2, and tier-3 towns and cities across the country, demonstrating its rapid growth and profound impact on the market. The company saw a month-over-month growth rate of over 104% in merchant sign-ups throughout metro areas. In addition, there was a sharp increase in merchant onboarding in Tier 2 and Tier 3 cities, with monthly growth rates above 95%.
Meanwhile, a Kirana Club survey found that 42% of Indian Kirana stores have already begun to accept alternative payment methods. According to the research, Paytm formerly held about 69% of the market share in Kirana retailers.
Survey on Fintech companies
The survey also uncovered a startling conclusion regarding local shops' level of confidence in Paytm. Twenty percent of respondents said they intended to use other payment apps shortly, even though forty-two percent of Kiranas had already begun using them. Out of the retailers who have either started using or plan to use other payment apps, the majority—50%—selected PhonePe, 30% leaning towards Google Pay, and 10% leaning towards BharatPe.
Kirana Club Founder & CEO Anshul Gupta stated, "While the regulatory authority's ban may disrupt Kirana stores, they are not concerned because there are alternative payment options available." Our latest survey also found that Kiranas across states have already begun or want to employ alternative payment apps to ensure smooth company operations."
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