India's digital payment pioneer Paytm's major transformation! Betting on AI agents in the workplace to seek a second growth curve

The Zhitong Finance App learned that India's digital payment pioneer Paytm is expanding into a new business to drive revenue growth recovery. According to people familiar with the matter, the company will begin selling artificial intelligence (AI) agents to enterprise customers, betting on the growing demand for such services that can automatically handle various workloads and tasks with minimal supervision. This marks a major shift in its core business — processing digital payments for consumers and businesses and providing a range of related services such as loans and investments.

According to people familiar with the matter, Paytm Intelligence (Pi for short), a new service launched by Paytm, can deploy AI agents in functional departments such as sales, customer service, and operations. They said that Pi will initially target banks, small lenders, insurance companies and other financial institutions in India and the UAE.

The core of Pi is a financial services AI model. Paytm has been developing this model for about two years. People familiar with the matter said that the model is based on massive numerical data sets accumulated over many years of processing financial transactions and analyzing customer behavior, and can predict fraud, credit qualifications, and the trustworthiness of claims claims.

According to people familiar with the matter, Paytm has begun providing Pi services to a small number of customers and plans to expand it to more customers soon. Paytm has stated that it plans to actively adopt AI throughout the entire business operation process. As an initiative to expand the merchant network and supply of AI-driven products, the company plans to recruit around 4,000 people by early next year.

India's first fintech companies are gradually maturing — they have moved from a phase of rapid customer and transaction volume growth to using their technology and data to find new ways to profit. The payments business, in particular, is under pressure to establish more profitable revenue streams, as the return on basic services is limited as competition intensifies.

Paytm was founded by Vijay Shekhar Sharma in 2010 to initially provide mobile prepaid recharge services, but soon turned its focus to digital payments and banking. The banknote scrapping policy at the end of 2016 helped the company solidify its leading position in India's fintech sector. Today, Paytm competes with competitors including PhonePe under Walmart (WMT.US) and Google Pay (GOOGL.US). Over the past two years, the company's stock price has more than doubled after cutting costs and beginning to achieve consistent profits.

Two years ago, regulatory hurdles threatened Paytm's business model, and now the company has overcome them, giving it confidence to try to transform into an AI service provider. Paytm's revenue has resumed growth and is profitable, but fierce competition in the digital payments sector has limited room for expansion in this market.

At the same time, digital payment companies around the world are embracing AI. Stripe LLC agreed to acquire OpenRouter Inc. last month to further expand into the infrastructure sector supporting the AI boom. Klarna Group PLC has reached an AI cooperation agreement with Google and OpenAI.

For Paytm, Pi marks its first major business transformation, combining payment business intelligence, behavioral models, voice technology, and workflow automation. People familiar with the matter said that its AI agent can assess customer needs, carry out commercial marketing activities, help win new customers, and cross-sell to existing customers.

Analyst Diksha Gera said, “The adoption of AI will drive significant performance differentiation among fintech companies. Leaders will use proprietary data and model feedback loops to further strengthen their strengths, while laggards will face pressure on profit margins as native AI competitors are redefining industry benchmarks for speed, accuracy, and personalized service. “Further breakthroughs will come from embedded models and automation, which can reduce service costs and spawn new AI-driven businesses, such as smart commerce, which is expected to reach $1.7 trillion by 2030.”