One97 Communications Ltd. Founder And Chairman Vijay Shekhar Sharma Interview...Employees work at their desks at the One97 Communications Ltd. headquarters in Noida, Uttar Pradesh, India, on Thursday, May 14, 2015. One97, which operates PayTM, think they have an edge as the country is now in the midst of a smartphone boom, and younger Indians are shunning branches and turning to apps for their banking needs, mirroring global trends. Photographer: Kuni Takahashi/Bloomberg
Employees work at their desks at the One97 Communications headquarters in Noida, Uttar Pradesh, India, in May 2015 © Bloomberg

Paytm, the Indian electronic payments company that has thrived following the country’s withdrawal of high value banknotes, has won the inaugural FT Future of Fintech impact award.

The business, which is backed by China’s Alibaba, was selected by a panel of judges ahead of India’s unexpected move to take Rs500 and Rs1,000 notes out of circulation last week. Its prize was announced at Wednesday’s FT Banking Summit.

A separate prize — in the fintech innovation category — went to Transmit Security a cyber safety start-up that brings together a range of biometric and other financial security services on to one platform.

These two winners were selected from more than 200 entrants, spanning the breadth of the burgeoning fintech sector and reflecting its dispersed global make-up.

Paytm’s award reflected the rapid incursions it has made in distributing e-wallets to customers and facilitating electronic payments — seen as crucial to financial inclusion in a fast emerging market like India. The business, which has 150m users, was recently valued at $5bn.

Paytm has also been one of the main beneficiaries following the Indian government’s decision to withdraw the country’s most widely used banknotes, which together account for more than 80 per cent of India’s cash in circulation.

The notes were withdrawn after concerns grew over their forgery and use on the black market — including their role in transactions to finance terrorism.

Reformers also believe that a shift away from an overwhelmingly cash-based economy should help boost the authorities’ ability to collect taxes.

“We have seen unprecedented growth over the past few days,” said Kiran Vasireddy, senior vice-president at Paytm.

In the first hour of business after the announcement of the banknote withdrawals, nearly $2m was added to Paytm accounts, 10 times the daily norm.

The FT Future of Fintech prizes, which will be awarded annually, were decided on by a judging panel comprising Patrick Jenkins and Martin Arnold, both of the FT; Bob Collymore, chief executive of Safaricom; Anshu Jain, the former Deutsche Bank head who is now an adviser to McKinsey Global Institute; Ricardo Perez, a professor at Madrid’s Instituto de Empresa; and Kosta Peric from the Bill and Melinda Gates Foundation.

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