Paytm soundbox demand rebounds after hitting zero in Feb post-RBI notification

Paytm’s soundbox demand: Paytm’s soundbox demand has staged a recovery after a strong decline in February 2024 following Reserve Bank of India’s (RBI) notice to Paytm’s banking arm, according to Shishir Gupta, CEO of Riot Labz, an ODM that manufactures Paytm’s soundboxes. 

In an exclusive conversation with Republic Business, Gupta said, “In February when the notification came, the demand for Paytm sounbox units suddenly dropped to zero. In March, the number has picked up with the demand for 50,000 units and in April we will be manufacturing 1.5 lakh devices again. According to our estimates, the number will again move to 5 lakh units per month from May onwards.” 

Gupta informed that Riot Labz was manufacturing five lakh soundbox units for Paytm in December 2023 which slowed down to two lakh units in January due to saturated coverage of 1.5 crore of the total 4 crore Paytm merchants across the country. According to Gupta, Paytm was re-strategising to increase the ground penetration for soundboxes before the RBI notice. 

Paytm Soundboxes are portable audio devices offered by Paytm that enable merchants to receive real-time sound notifications for all the payments made to their accounts. 

The RBI had in February imposed restrictions on the operations of Paytm Payments Bank Ltd (PPBL). It instructed PPBL to cease accepting deposits or top-ups in customer accounts, wallets, FASTags, and other PPBL instruments starting from February 29.

Soundbox business not affected

Talking about Paytm’s soundbox business, Gupta told Republic that RBI notification had no major impact on our operations as demand is going back to normal. Gupta said, “Right now there is an impact on the demand for our business but it was more in February when the RBI’s notification came and Paytm’s focus was all on compliance required by the RBI. The good thing for us is that the soundbox business is not affected due to the recent happenings as much as Paytm’s FastTag and Wallet business is affected. The soundbox business has become one of the mainstays of Paytm.”  

“I think we have done an excellent job with Paytm when it comes to penetration and providing the right services to the merchant. Starting from April, the business is coming back to as usual and the production is again getting ramped up.” 

With the rising popularity of the product, Paytm also released Music Soundbox, which doubles up as a Bluetooth speaker for merchants for music playback, and Paytm Pocket Soundbox, a portable version of the current payment acceptance device for cart vendors, delivery personnel and auto drivers.

India can manufacture cheaper and better products   

Gupta mentioned that making electronic products in India is still not easy when compared to importing from China as it takes a few more months to do it within the country. Gupta said, “The Chinese ecosystem has matured with major investments over a long period that enable Chinese manufacturing units to churn out products at a much higher speed when compared to India. But when you manufacture in India, each aspect of the design is done locally which enables us to make the product far better.” 

Gupta said, “We as Indian manufacturers know our customers better than anyone and we make the required changes in the product to cater to the customer behaviour. With many of our products, we were able to reduce the price of the product by up to 45 per cent when compared to exporting them from China.