A sign advertising the mobile-phone payment system Paytm at a roadside stall in Mumbai. Photo: AFP

India’s leading mobile-phone payment platform, Paytm, which has China’s Alibaba and Japan’s SoftBank as major investors, is witnessing rapid growth in Tier 2 and 3 cities. The company claims these cities now constitute 50% of its user base, The Times of India reports.

Paytm has now achieved a run rate of 5 billion transactions and US$50 billion in gross transaction value. During the 2017-18 financial year the gross transaction value was $14 billion.

Paytm accounts for nearly a third of Unified Payments Interface in the country. UPI is a system that powers multiple bank accounts in a single mobile application.

Its multilingual app has also contributed to its growth with 25% transacting on the platform in their native languages.

The Paytm brand is owned by One97 Communications, promoted by entrepreneur Vijay Shekhar Sharma. It currently has six companies under its umbrella, including Paytm, Paytm Mall, Paytm Money, Paytm Payments Bank, Paytm Life Insurance Corp Ltd and Paytm General Insurance Corp Ltd.

Paytm saw a rapid rise in its user base when the Indian government banned high-value currency notes in November 2016. As cash became scarce, digital wallets were the simplest answer and people flocked to this alternative.

The number of wallet customers went from 125 million before demonetization to 185 million three months later, and it has continued to grow, hitting 280 million users by November 2017.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.