For years, tech executives have been droning on about AI’s ‘potential’. It’s become the corporate equivalent of eating your greens – something you know you should do, but the real benefit feels distant and a bit abstract. We’ve been inundated with presentations about efficiency gains and productivity boosts, which are all well and good, but they don’t exactly set the world on fire. They’re cost-savers, not money-makers. It seems Vijay Shekhar Sharma, the chief at Paytm, has finally had enough of the platitudes and decided to put his money where his mouth is.
In a move that should make everyone in the industry sit up and take notice, Sharma has essentially declared that for Paytm, AI isn’t just a back-office tool to make things run a bit smoother. It’s the main event. As he bluntly put it in a recent interview with Moneycontrol, AI is now “a revenue line.” This isn’t just another company bolting on a chatbot and calling it innovation. This is a fundamental strategic pivot, an attempt to transform artificial intelligence from a corporate expense into a bona fide product. The rest of the fintech world should be paying very close attention.
What’s All the Fuss About AI Revenue Generation?
So, what does it actually mean to make AI a “revenue line”? Most companies currently use AI in one of two ways. The first is to cut costs. Think automated customer service, optimised logistics, or fraud detection systems that save millions in losses. This is valuable, but it’s indirect. The money saved appears on the balance sheet, but you’re not selling ‘cost savings’ as a product. The second way is to enhance an existing product to make it stickier or marginally better, hoping it attracts more users.
True AI revenue generation is the next step. It’s about creating entirely new products, services, or capabilities, powered by AI, that customers are willing to pay for directly. It’s about looking at your vast troves of data and your algorithmic prowess and asking: “What service can I build with this that someone will give me money for, month after month?” This is a much harder proposition, but it’s also where the real growth lies. It’s the difference between using a satnav to find a quicker route to your existing job (efficiency) and using it to become a private taxi driver, creating a whole new income stream (direct revenue).
This shift requires a change in thinking about AI business models. Are you using AI to refine your existing business, or are you using it to build a completely new one alongside it? For a long time, the answer has been the former. Paytm is making a very public bet on the latter. This isn’t just about tweaking the payment app; it’s about building an entirely new business vertical centred on intelligence.
AI in Fintech Innovation: Beyond the Basics
Let’s be clear, fintech innovation driven by AI is nothing new. For years, AI has been the secret sauce in everything from algorithmic trading and credit scoring to identifying complex money laundering schemes. It’s the invisible engine that makes much of modern finance tick. Without it, the system would be slower, more expensive, and far more vulnerable. But for the most part, these have been internal tools. The bank uses AI to decide if you get a loan; they don’t sell you the ‘AI loan decision service’.
This is where Paytm’s gambit becomes so interesting. Instead of just using AI to improve its own payment processing or risk management, it plans to package and sell AI-driven services directly to its massive base of merchants. This is a significant strategic leap.
Case Study: Paytm’s Plan to Turn AI into Actual Cash
According to that same Moneycontrol report, Paytm isn’t just talking a big game. The company is already piloting AI-led subscription services for its merchant partners. The idea is simple in theory, but incredibly complex in execution. Merchants who use Paytm’s platform generate a colossal amount of data: what sells, when it sells, who buys it, and how they pay. Paytm’s plan is to use AI to turn that raw data into actionable business intelligence and sell it back to the merchants as a subscription.
This could include services like:
– Predictive Sales Analytics: Helping a shop owner know they need to order more milk before the weekend rush.
– Personalised Marketing: Automatically sending a discount voucher for a customer’s favourite coffee to their Paytm app.
– Intelligent Inventory Management: Analysing transaction patterns to suggest optimal stock levels.
To make this vision a reality, Paytm has announced a partnership with the US-based AI chipmaker Groq. This is not a trivial detail. Groq designs hardware—LPUs, or Language Processing Units—that is exceptionally fast at AI inference, the process of using a trained AI model to make a prediction. This partnership signals that Paytm isn’t planning on running a few reports overnight. They are building for real-time AI. The kind of speed needed to power their iconic soundbox with intelligent, conversational capabilities, or to provide instant recommendations to a merchant on the shop floor. They are thinking about the full stack, from the silicon all the way up to the service.
But the most telling detail of Sharma’s plan is a small accounting one: the company intends to report its “AI commerce cloud” as a separate line item in its financial statements. This is the ultimate proof of commitment. It’s a clear and unambiguous signal to investors, analysts, and competitors that this is not an experiment or a PR stunt. It’s a core business unit that will be expected to stand on its own two feet and, crucially, generate profit.
Why a Commerce Cloud is the Perfect Vehicle for AI
The term that keeps cropping up is “commerce cloud technology.” What does that mean, and why is it so important here? Think of platforms like Shopify or Salesforce Commerce Cloud. They provide merchants with all the digital tools they need to run their business in one place: a website, payment processing, inventory management, and marketing tools. It’s the central nervous system for their commercial operations.
Paytm is building its own version of this, tightly integrated with its payment network. A commerce cloud is the perfect delivery mechanism for AI services. Why? Because the platform already has two crucial ingredients:
1. The Customers: Merchants are already on the platform, using it for their daily business. There’s no need to go out and find a new customer base.
2. The Data: The platform is a firehose of high-quality, real-time commercial data. It’s the raw fuel that every AI model craves.
By building AI services on top of its emerging commerce cloud, Paytm can create a powerful flywheel. Better AI tools attract more merchants to the platform. More merchants generate more data. More data allows Paytm to build even better AI tools. It is a classic platform strategy, supercharged with artificial intelligence. This integrated approach creates a sticky ecosystem that is much harder for competitors to disrupt than a simple payment service.
What’s Next on the AI Payday?
Paytm’s bold move throws down the gauntlet to the entire fintech industry. It raises the competitive stakes significantly. It’s no longer enough to be a payment processor or a digital wallet. The new battleground is becoming about who can provide the most intelligence to their customers. Will we see rivals like Google Pay, PhonePe, or even global players like Stripe and Square follow suit and start explicitly charging for AI-powered business tools?
The future of AI revenue generation in this space seems destined to follow this model. We will likely see a move away from monolithic, one-size-fits-all services towards a menu of optional, AI-powered add-ons that businesses can subscribe to. This could create a more sustainable and diverse revenue stream for fintech companies, moving them beyond the wafer-thin margins of payment processing. The question is no longer if AI will fundamentally change business, but who will be the first to figure out how to consistently and effectively charge for it.
Paytm is placing a huge bet that it can be that company. By making AI revenue generation a core tenet of its strategy and building the commerce cloud technology to deliver it, it is attempting to define the next phase of fintech innovation. It’s a high-risk, high-reward strategy. Success could see Paytm evolve from a payments company into a far more valuable and indispensable business intelligence platform. Failure could be a costly distraction.
But what do you think? Is this a masterstroke from Vijay Shekhar Sharma, finally turning AI from a buzzword into a business? Or will merchants, already squeezed by tight margins, baulk at paying for yet another subscription service? The next few earnings reports from Paytm will certainly make for fascinating reading.
