Paytm’s offline payments strengthen, loan distribution biz gains scale in Q4

• The average monthly tracked users reached 90 million during the three months ending in March 2023.
  
• The number of subscribing merchants for Paytm devices reached 6.8 million, an increase of 1 million in Q4.
  
• The company processed a total merchant gross merchandise value of ₹3.62 lakh crore through its platform during the quarter ending in March.
  

Paytm reported a growth in payment and loan distribution business in an update on its operating performance for Q4 FY23. Its payment devices saw an increased subscription by merchants, while merchant payment volumes continued to grow.

The Paytm Super App has seen an increase in customer interactions, with an average monthly tracked users (MTU) of 90 million during the quarter. This represents a 27% y-o-y growth, the company said in the update.

For the quarter ended December 2022, the MTU was 85 million. Paytm’s UPI Lite which facilitates quick and hassle-free small value transactions has crossed four million users, and has crossed one crore transactions since launch in February.

Higher adoption of payment devices

The company also said that it has been actively strengthening its position in offline payments. Their subscribing merchants increased by one million for payment devices in Q4, bringing the total to 6.8 million.

“With our subscription as a service model, the strong adoption of devices drives subscription revenues and higher payment volumes, while increasing the funnel for our merchant loan distribution,” Paytm said in its update. It launched its payment device based on an Android platform in 2020.

Paytm also processed a total merchant gross merchandise value (GMV) of ₹3.62 lakh crore ($44 billion) through its platform during the quarter, indicating a y-o-y growth of 40%.

The company has been focussing on increasing payment volumes in the past few quarters, that can generate profitability through net payments margin or by creating opportunities for direct upselling.

Growth in loan distribution business

The company's loan distribution business, which it operates in partnership with top lenders, has experienced a rapid growth rate. This business saw a 253% year-over-year increase in total disbursements through its platform for the quarter ending March, which amounted to ₹12,554 crore ($1,528 million).

“Our payments consumer and merchant base offers a large addressable market, thereby providing a long runway for growth. We continue to work with our partners to remain focused on the quality of the book,” the company said.

The stock of One 97 Communications (Paytm) was listed on NSE in November, 2021.