Paytm CEO Vijay Shekhar Sharma, speaking at Startup Mahakumbh 2025, today said that when it comes to his company, they are at a stage where they are beginning to understand artificial intelligence's practical, real-world applications.

He said that AI is currently at a stage where both businesses and the general public are beginning to understand its practical applications, particularly with ChatGPT’s Ghibli-style image trend.

"While Paytm acknowledges the potential of AI, the company is taking a measured approach in integrating it into its merchant payment solutions," he said.

Sharma refrained from confirming whether Paytm is partnering with any external AI firms but emphasised that the company is focused on developing in-house AI-driven solutions.

At present, Paytm is assessing the feasibility and viability of AI applications in its ecosystem, ensuring that any implementation aligns with the needs of its merchant partners. Given this cautious approach, an immediate rollout of AI-powered features is unlikely.

Sharma, being asked about the company's plans on incorporating AI in a big way into the Paytm ecosystem, told Fortune India: "We’re (Paytm) putting in a tremendous amount of work into AI innovation, especially features designed for small businesses. But our biggest concern is market adoption. Will people pay for these solutions? Take VR, for example. It’s packed with AI-powered tools that shopkeepers and small businesses can use. The potential is huge, but will they see the value?"

The primary objective, Sharma said, is to explore how AI can enhance the efficiency of merchant transactions, making payment processing more seamless and streamlined. While the company remains committed to leveraging AI, its current priority is to refine and validate its in-house solutions before introducing them to the market.

Talking about risks associated with AI, Sharma said people should be made aware of this. "If you create an image, you create content, you create something. People should be aware that this is an AI-generated. So now the next thing for Paytm is to bring AI usage for small merchants in the country, whether it is about their everyday business, cost saving, service enhancement, business enhancement, and that is what we will work on."

On being ask why India has not been able to create a global AI platform of the likes of OpenAI's ChatGPT or Chinese AI model DeepSeek, Sharma said: "AI platforms like DeepSeek have sent a statement that many more countries will produce many more AI platforms and I am confident -- we as Indians are building incredible products -- there'll be many more successful products coming from India in the AI space."

Earlier this year, Paytm partnered with Perplexity AI to enhance AI-powered search capabilities within its app. As part of its broader strategic evolution, the platform has undergone a complete redesign, with a strong emphasis on payments and financial services. The shift aligns with Paytm’s ongoing efforts to streamline its offerings and reinforce its position as a leading player in the digital payments ecosystem.