How Does PAYTM Work

How Does PAYTM Work?

What exactly is paytm, how does it work and how can one use it? In this digital age, most of the countries in the world are gradually going cashless and because of this a lot of digital wallets and online payment solutions have evolved. Among them is paytm.

What exactly is paytm and how does it work? Read on to find out the answers.

Paytm, an acronym for pay through mobile was founded by Vijay Shekhar Sharma. According to, “Paytm is India’s largest mobile payments and commerce platform. It started with online mobile recharge and bill payments and has an online market place today. Paytm is the consumer brand of India’s leading mobile internet company, One97 communications.”

PayTM Business Model and How does PayTM Make Money

Through paytm platform, you can transfer cash from your bank account or credit card into a digital wallet called paytm wallet. From your paytm wallet you can then make cashless payment such as the payment of bills, prepaid recharge, recharges for mobile phone, metro cards, DTH recharge, data cards etc. you can also use the paytm wallet to buy goods from ecommerce platforms, pay for services like Uber and book tickets for buses, trains, flights, movies and hotel rooms.

The India’s demonetization policy which led to the ban of Rs 500 and Rs 1000 notes. This has resulted in cash crunch and the effect is that a lot of people now depend on online payment solutions for their day to day transactions.  Of all these online payment solutions, paytm is the most popular and widely used. This is because of its many benefits:

  • Making payment on paytm is simple and easy. It doesn’t make use of POS machine, with just one single tap on your phone, you can make your payment without going through the hassle of authenticating your payment transaction.
  • It is easily accessible as almost every businesses accepts it as a means of payment.
  • It doesn’t require any charges when you make transactions.
  • The use of paytm passbook makes it easy for users to keep track of their expenses.
  • Paytm give out deals like discount, free coupons and cash back on most of their transactions.
  • Paytm can be used to make offline transaction. This will greatly help when there is no good internet connection to facilitate online transactions

But despite these and many other benefits that made paytm popular, there are still a lot of people who are yet to start making use of the paytm platform. This is because they don’t know how paytm works. And to make use of something, you have to know how it works.

If you are interested in using paytm but you don’t know how it works, the following step by step guide will show you how.

What Is Paytm, and How to Use Paytm Wallet?


Go to, Play Store or ios App Store and download paytm app on your mobile phone. After this, install it.


Open the App and set up a paytm account using either your mobile number or email ID. When creating your paytm account, you will get a One Time Password (OTP) through SMS which you will then use to create a password for your account.


Log into your account with the password you created and add some money to your paytm wallet. To do this:

  • Click on the ‘ADD MONEY’ at the home page of the paytm app.
  • Enter the amount you want to add to your paytm wallet.
  • Then click on ‘ADD TO WALLET’ and then click on ‘PROCEED TO PAY Rs’
  • Choose the suitable method to pay the money. This can either be your bank account, credit card or debit card. The amount will be credited instantly in your paytm wallet.
  • Immediately, the money will be credited into your paytm wallet.

The maximum amount of money you can add to your paytm wallet is Rs 20,000. However, if you want to add more than that, you will have to get Know Your Customer (KYC) processor. This will enable you to add up to Rs 1 lakh in your paytm wallet. You can use the money in your paytm wallet to make payments online and also in stores that accepts Paytm.


To make payment, open the app, login and click on ‘PAY’. When you do this, three payment options will pop up: SCAN CODE, MOBILE NO and SHOW CODE.

To use the SCAN CODE option:

  • Request the paytm QR code from the seller you want to buy from.
  • Click on the scan code option
  • Scan the code with your paytm app
  • Enter the amount of money you are required to pay and tap the ‘pay’ option.
  • The money will be immediately transferred to the paytm account of the seller

To use the MOBILE NO option:

  • Get the phone number of the person that wants to receive money from you.
  • Click on the mobile number option
  • Input the number
  • Enter the amount of money you want to send and click on send

To use the SHOW option:

  • Tell the seller you are buying from to scan the QR code in your app.
  • Enter the amount of money you want to pay.
  • Make payment.


You can send money from paytm wallet to bank accounts. To do this:

  • Login to your paytm app
  • Click on pass book icon
  • Click on send money to bank
  • Click on transfer
  • Enter the amount of money that you want to transfer
  • Write the name of the person you are transferring money to his account
  • Input the account number of the person you are transferring money to his account
  • Enter IFSC Code
  • Click on send

There are so many features to explore on the paytm app. But you can start the basic ones I explained in this article. As you become more conversant with the use of the app, you will get to know about the other features and how they work.

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