The cost of a crisis

Paytm is using every trick in the book to check brand erosion

CONSUMERS TODAY ARE spoilt for choice. They have more products, many more brands and certainly a range of payment options.

That is great for the average consumer, but it adds to the layers of challenges for brands. Consumers can switch from one product to another without much hassle, and it doesn't take much for their perception about a brand to nosedive.

That's the problem facing fintech company Paytm, which finds itself in the eye of a storm brought on by the recent decision by the Reserve Bank of India (RBI) to bar Paytm Payments Bank from accepting fresh deposits or top-ups in any customer account, wallets or FASTags after February 29, citing non-compliance and regulatory concerns. This move has put the brand, credited with leading India's digital payments revolution, on the back foot. "The current episode raises some serious governance issues at Paytm, which are the most important drivers of value when it comes to financial entities," says Ajimon Francis, MD India for Brand Finance. He estimates that Paytm will see an erosion in its brand value by at least 20%, if not more.