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<keyword id="19947542" type="General" weightage="20" keywordseo="One-97-Communications" source="keywords" meta.keywordsubtype="org" meta.entityname="One 97 Communications" meta.hostid="261" meta.entityid="One 97 Communications">One 97 Communications</keyword>, that operates popular fintech brand <keyword id="19898109" type="General" weightage="20" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="261" meta.entityid="Paytm">Paytm</keyword>, reported a 25 per cent rise in revenue at Rs 9,978 crore in the just concluded financial year 2023-24. The company attributed the growth to GMV growth, device additions, and growth in the financial services distribution business. Since its IPO, when the company went public, it for the first full year EBITDA before ESOP profitability of Rs 559 crore, its earnings results released Wednesday showed. In the January-March quarter, however, Paytm reported a revenue of Rs 2,267 crore, a modest decline of 3 per cent year-on-year. "In Q4 FY 2024, we had lower marketing spends, as we paused most of the user growth spending in the month of February and March. We expect to reinvest in these areas in the coming financial year," Paytm informed stock exchanges. "While we experienced a financial impact in Q4 due to the above disruptions, the full financial impact will be seen in Q1 FY 2025." Paytm says it is confident of seeing meaningful improvement starting from Q2 2024-25, based on restarting certain paused products and achieving steady growth in operating metrics. In Q1 of the current fiscal, its focus will be on acquiring new merchants, reactivation of inactive merchants, and redeployment of devices from inactive merchants to new merchants. "While there will be a smaller net addition of device merchants in Q1 FY 2025, we expect net additions to improve from thereon and recover to past trendlines by Q3 FY 2025." Its revenue from payment services were up 26 per cent to Rs 6,235 crore; net payment margin was up 50 per cent to Rs 2,955 crore; gross merchandise value (GMV) up 39 per cent to Rs 18.3 lakh crore. Merchant paying subscriptions for devices have reached 1.07 crore as of March 2024, an increase of 39 lakh. Revenue from financial services and others up 30 per cent to Rs 2,004 crore; value of loans distributed was up 48 per cent to Rs 52,390 crore. Further, Paytm said that the active rate and per device subscription revenue has been impacted. Merchant subscription revenue in Q4 was Rs 90 per device per month and it expects it to bottom out at Rs 80 in Q1, post which it should increase towards Rs 100 by Q4 of the current fiscal. "We continue to address our merchants' needs through innovative product launches and are backed by a large distribution and service network. We recently launched two more "Made in India" soundboxes which are customized to the needs of our merchants, with louder speakers and longer battery life." SEE ALSO:<a href="https://www.businessinsider.in/stock-market/webstories/awfis-space-solutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/110305597.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/webstories/awfis-space-solutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/110305597.cms" target="_blank">Awfis Space Solutions IPO – Price band to risk factors, all you need to know</a><a href="https://www.businessinsider.in/sports/webstories/rajasthan-royals-vs-royal-challengers-bengaluru-head-to-head-record-key-players-and-more/slidelist/110298325.cms" target="_blank"></a> <a href="https://www.businessinsider.in/sports/webstories/rajasthan-royals-vs-royal-challengers-bengaluru-head-to-head-record-key-players-and-more/slidelist/110298325.cms" target="_blank">Rajasthan Royals vs Royal Challengers Bengaluru: head-to-head record, key players and more</a><a href="https://www.businessinsider.in/tech/news/indias-pc-market-grows-by-2-6-in-q1-2024-recording-third-consecutive-quarter-with-growth/articleshow/110292150.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/indias-pc-market-grows-by-2-6-in-q1-2024-recording-third-consecutive-quarter-with-growth/articleshow/110292150.cms" target="_blank">India's PC market grows by 2.6% in Q1 2024, recording third consecutive quarter with growth</a>

Paytm registers 25% growth in revenue at ₹9,978 crore in 2023-24

<keyword id="19898109" type="General" weightage="100" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="261" meta.entityid="Paytm">Paytm</keyword>'s parent company, <keyword id="20253123" type="General" weightage="20" keywordseo="One97-Communications" source="keywords" meta.keywordsubtype="org" meta.entityname="One97 Communications" meta.hostid="261" meta.entityid="One97 Communications">One97 Communications</keyword>, declared its Q2FY25 results today, announcing a one-time, exceptional profit of Rs 1,345 crore during the quarter, thanks to the sale of its entertainment ticketing business. The company's PAT (profit after tax) stood at Rs 930 crore. Notably, without this windfall gain, Paytm's finances would still be in red, with the company racking up losses worth Rs 415 crore. Paytm was in red in the year-ago period as well, incurring losses worth Rs 290.5 crore. This windfall profit also improved Paytm's EBITDA by Rs 388 crore on a QoQ basis. The company's revenue also saw a slight uptick of 10.5% quarterly to Rs 1,659 crore, as opposed to Rs 1,501 crore in the previous quarter. But on a year-on-year basis, Paytm's revenue dipped significantly by 34%. The company also announced that it has entered into a DLG (<keyword id="23641220" type="General" weightage="20" keywordseo="Default-Loss-Guarantee" source="keywords">default loss guarantee</keyword>) model for its merchant loans of about Rs 225 crore with SMFG India Credit. Under this arrangement, Paytm will be first in line to take a hit in case of a loss that emerges from borrowers defaulting or skipping their payments. "Following the regulatory framework and the emerging market practice, we see increased willingness from lenders to partner and allocate more capital in the default loss. The DLG model will help to increase disbursements with the existing partners and expand partnerships with new lenders for the loan distribution,” said the company in its earnings release today. The company's revenue from its payment business also inched up 9% on a quarterly basis, along with its revenue from <keyword id="19976433" type="General" weightage="20" keywordseo="financial-services" source="keywords">financial services</keyword>, which also grew by 34% QoQ. At present, Paytm's total merchant subscriptions stand at 1.12 crore, with the company garnering 3 lakh new merchants during the quarter. During the previous quarter, Paytm's <keyword id="20253122" type="General" weightage="20" keywordseo="gross-merchandise-value" source="keywords">gross merchandise value</keyword> (GMV) also inched up by 5% on a sequential basis, which experts anticipate will continue in the coming quarters, just as India braces for the festive season. Per its release, Paytm aims to achieve <keyword id="23641219" type="General" weightage="20" keywordseo="EBITDA-profitability" source="keywords">EBITDA profitability</keyword> (before ESOPs) by the fourth quarter of this financial year. However, investors remained unimpressed with Paytm's performance, with its share slipping by around 3.96% during the day to trade at Rs 697.20. The stock has a YTD (yield-to-date) of 7.91% during the year.

Paytm declares Q2 results, earns Rs 930 crore as windfall gains by way of sale of ticketing business to Zomato

New Delhi: Online food delivery platform <keyword id="19901323" type="General" weightage="100" keywordseo="Zomato" source="keywords" meta.keywordsubtype="org" meta.entityname="Zomato" meta.hostid="83" meta.entityid="Zomato">Zomato</keyword> will acquire <keyword id="19898109" type="General" weightage="20" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="83" meta.entityid="Paytm">Paytm</keyword>'s entertainment <keyword id="20028334" type="General" weightage="20" keywordseo="ticketing" source="keywords">ticketing</keyword> business for Rs 2,048 crore to strengthen its "going-out" segment in a deal that will help the troubled fintech firm to sharpen its focus on core payments and financial services distribution. Paytm's entertainment ticketing business covers movies, sports, and events (live performances). The boards of Zomato and One 97 Communications Ltd (OCL) have approved the all-cash deal. As part of this agreement, OCL's entertainment ticketing business will transfer business to its 100 per cent subsidiaries Orbgen Technologies Pvt Ltd (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL), followed by the sale of 100 per cent stake in these subsidiaries (which operate the TicketNew and Insider platforms) to Zomato. Subsequently, Zomato will spin off the new business into a new app called 'District'. Under the deal, Zomato will fully acquire Orbgen Technologies Pvt Ltd (OTPL), which is into movie ticketing, for Rs 1,264.6 crore and buy Wasteland Entertainment Pvt Ltd, which is into events ticketing for Rs 783.8 crore. The combined entertainment ticketing business has a scale of Rs 297 crore in revenue and Rs 29 crore in adjusted EBITDA in FY24. "The transfer will also include around 280 existing employees from the entertainment ticketing business," OCL said in a statement, adding that the transaction generates significant profits for Paytm and cash proceeds will further strengthen the balance sheet. Announcing the deal, Paytm said it allows the fintech to strengthen its focus on core payments and financial services distribution. Paytm said with its strong focus on long-term value creation, the company remains confident in substituting revenue from its entertainment ticketing business by expanding core business areas of payments and financial service distribution. "This move allows us to continue focusing on long-term growth in our core areas and value creation for all stakeholders," a Paytm spokesperson said. On the other hand, Zomato Managing Director and CEO <keyword id="19901325" type="General" weightage="20" keywordseo="deepinder-goyal" source="keywords">Deepinder Goyal</keyword> in a letter to shareholders said, "The proposed acquisition helps us add more scale and offer newer use-cases (like movie and sports ticketing) to our customers in this segment". Zomato believes the deal makes it more relevant to its customers and gives an opportunity to spin off the business into a new app. "We are going to call it District, which could be a game changer for each of these use cases given the need for a single brand as a destination in this segment," Goyal added. Zomato is keen to position 'District' as the brand that consumers turn to when they are thinking of going out, he added. OTPL was incorporated on November 23, 2007, in India. It is in the business of listing and sale of movie tickets and other services. It had a turnover of Rs 13.14 crore in the fiscal ended March 31, 2024. WEPL was incorporated on December 21, 2015. It is in the business of listing and sale of event tickets and other services. Its turnover in the FY24 was Rs 236.03 crore. Paytm said the move to sell its entertainment ticketing business underscores its core focus on payments and financial services distribution. "In recent quarters, the company has also expanded its offerings in insurance, equity broking, and wealth distribution, with a significant opportunity to cross-sell these services and grow its market presence as a leading financial services distribution player," Paytm said. During a transition period (up to 12 months), the movie and event tickets will continue to be available on the Paytm app, as well as on the TicketNew and Insider platforms, ensuring a smooth and uninterrupted experience for users and merchant partners. Paytm said the deal underscores its success in building businesses and creating value for shareholders. Zomato's Goyal said the District app is expected to be launched anytime in the next few weeks. Post this acquisition, he said Zomato's going-out business would be spread across multiple different platforms. Its existing going-out business (dining-out + event ticketing) would continue to run on the Zomato app, and the acquired business -- movie, sports and event ticketing -- would continue to run on Paytm's main app for a transition period of up to 12 months, along with Insider and TicketNew apps. Both of these would get transferred to Zomato as part of the transaction. District app will duplicate the offerings above and over time, we will gradually nudge our customers to move from the Zomato, Paytm, Insider, and TicketNew apps to the District app. "Once most customers start transacting on the District app, we will remove the duplication and shut down this business on all the other apps. Eventually, there will just be a button to launch the District app on the Zomato app (like it is for Blinkit today) so that we continue to tap into the large customer base of Zomato," he added.

Zomato to acquire Paytm's entertainment ticketing business for Rs 2,048 crore

As the pioneer of mobile payments and QR technology, Paytm has established itself as a leader in India’s rapidly-expanding digital payments space and has become the go-to payment platform for millions of Indians. As India’s largest payments platform, Paytm is the leading digital ecosystem for consumers and merchants. It helps merchants grow their businesses by giving them solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services. Paytm was the first company to launch QR payments for in-store merchants in India in 2015, allowing small shopkeepers to accept digital payments at zero upfront cost. They launched the All-in-One QR Code in January 2020, giving merchants the power to seamlessly accept payments from multiple instruments like Paytm Wallet, Paytm UPI, Net Banking, Paytm Postpaid, all major debit cards, credit cards and prepaid cards, and all other UPI apps directly into their bank account. For online merchants, Paytm offers a comprehensive platform to accept payments through Paytm Payment Gateway. By integrating the service, merchants can start accepting online payments and expanding the digital reach of their businesses. As the company looks to grow profitably by leveraging its technological capabilities and customer base, Paytm has been able to deliver strong growth in the recent quarter through two key margin drivers in its payment business – payment processing and subscription revenues. Two key margin drivers behind Paytm’s strong growth For payment services, Paytm primarily generates revenues from the transaction fee it charges merchants based on a percentage of transaction value and consumer convenience fees from consumers for certain types of transactions. The fee percentage varies by the type of payment instrument used by consumers and the category of merchant. Paytm also earns recurring subscription fees from merchants for certain products and services, such as Paytm Soundbox and PoS. It has demonstrated its leadership in offline payments with 5.8 million merchants paying subscriptions for our payment devices, such as Soundbox and PoS, as of December 2022. Paytm’s subscription-as-a-service model drives strong adoption of devices, which leads to higher payment volumes and subscription revenues. This in turn increases the funnel for its merchant loan distribution. Paytm’s revenue from Payment Services to Consumers, which includes income from use cases such as bill payments and top-ups on the Paytm app, grew by 55% from a year ago to ₹549 crore in Q2FY23. Consumers pay platform fees to Paytm for select use cases whereas merchants pay MDR or Merchant Discount Rate. Meanwhile, revenue from Payment Services to Merchants rose 56% year-on-year to ₹624 crore in the Q2FY23, driven by strong growth in the payments devices business. Payment Services to Merchants includes revenues from Paytm’s comprehensive offerings of online and in-store payment acceptance services such as Payment Gateway, All-in-one and Dynamic-QR, POS, and Soundbox. Merchants pay MDR for cards, wallet, net banking payments, and subscriptions for devices. For UPI person-to-merchant payments, the government pays incentives. In the latest analyst presentation, Paytm said that it charges around ₹100 per month per active device with some high-end devices commanding higher fees of up to ₹250 per month. In some cases, select installations also receive additional incentives from partner banks, the Reserve Bank of India (RBI), and the National Bank for Agriculture and Rural Development (NABARD). Paytm’s management believes that it is still the early days of payments in India as there are only 25 crore registered UPI users and 1 crore total devices in the market. Paytm believes that India could have the potential of 10 crore merchant entities and more than 50 crore payment customers in the near term. “We believe overall subscriptions for payment and other services will be a large market,” the company said in a presentation to analysts recently. Through payment processing, Paytm makes a net payment margin of 7-9 bps of GMV. Of this, 3-4 bps are earned from UPI transactions and 15-18 bps from transactions through other instruments such as wallet, debit card and credit card. Paytm believes that government incentives for UPI could be higher this year due to a rise in volumes. “Due to the tailwinds for UPI merchant payments, we are also able to make attractive subscription revenues for payment devices, and MDR for non-UPI payments,” Paytm said in its Q2 earnings release. Given UPI is growing at a faster pace than other instruments, Paytm expects its blended margin to stabilize at 5-7 bps. The company also noted that payment processing charges will trend lower as a percentage of GMV due to the increasing mix of UPI as well as routing and rate optimizations. Payment processing charges as a percentage of GMV came down to 0.23% in Q2 FY23 compared to 0.34% in the corresponding quarter last year. Paytm’s net payments margin stood at ₹443 crore, up 428% year-on-year, driven by improved monetization and continued improvements in payment processing charges. Paytm sees merchant subscriptions as an attractive profit pool driving higher payment volumes, subscription revenues as well as merchant loan distribution. Further, higher GMV from online merchants in the payment gateway business and continued growth in subscription and MDR revenues from our offline merchants helped Paytm clock a 56% growth in Q2FY23 Payments Services revenue. Paytm is also expanding its monetization base with the growth of users and merchants. UPI is helping Paytm with efficient user and merchant acquisition. Since the offering is free for merchants, it hence encourages high usage. In addition to government incentives, the opportunity to upsell loans as well as payments devices to merchants has made UPI economically viable for Paytm. Payments offerings such as Paytm QR are the company’s primary means to onboard offline merchants, whereas products such as Soundbox and PoS devices increase merchant engagement and retention in Paytm’s ecosystem with attractive monetization characteristics. In 2019, Paytm became the first in the market to introduce an IoT-enabled payment acceptance device, Paytm Soundbox, that helps merchants get instant audio confirmation on every payment received via QR code. With Soundbox, Paytm brought about a technological innovation in in-store payment acceptance in India. In 2021, the capabilities of the Paytm Soundbox were upgraded with the launch of Paytm Soundbox 2.0 equipped with Paytm All-in-One QR Code and a digital screen that gives instant visual confirmation of the paid amount along with voice notification.The innovative device has addressed a gap and specific need among merchants and has played a pivotal role in establishing digital transactions as a safe and secure process, enhancing the trust of merchants and consumers to move digitally. Given its wide suite of offerings to merchants, and the ability to drive higher consumer engagement and stickiness through Paytm Payment Instruments, Paytm has a unique monetization model compared to its peers. Disclaimer : This article has been reproduced from Paytm's blog. The opinions expressed are those of the organization and do not necessarily reflect the views of Business Insider India. For further details, you can get in touch with our team on insiderstudios@businessinsider.in

Payment processing and subscription revenues: Two key margin drivers behind Paytm’s strong growth

<ul><li><keyword id="6357120" type="General" weightage="100" keywordseo="paytm" source="Orion">Paytm</keyword> Q2 EBITDA before ESOP improves 61% (YoY)</li><li>Its commerce and cloud services division reported revenue of ₹377 crore in Q2</li><li> Its financial services at ₹349 crore now accounts for 18% of the company’s total revenue.</li></ul>India’s fintech giant Paytm is inching closer to its profitability target. The company today posted its September-ending quarterly earnings, where it saw its revenue grow by 76% to ₹1,914 crore. Interestingly, the company’s EBITDA before ESOP costs stood at ₹166 crore, improving 61% (YoY). The company said, “We are expanding our monetization base with growth of users and merchants. Merchant subscriptions are an attractive profit pool for us, driving higher payment volumes, subscription revenues as well as merchant loan distribution.” Driven by continued platform expansion, higher user engagement, growing merchant base and devices-led leadership in offline payments, the company payments business revenue grew 56% (YoY) and 9% (QoQ) in Q2FY23. <div type="image" title="Paytm" msid="95364298" hostid="261" sizebytes="47208"></div> Revenue from payment services to consumers stood at ₹549 crore, up by 55% (YoY), while payment services to merchants was ₹624 crore, up by 56% (YoY). The company said its net payment margin (calculated as payments revenues plus other operating revenues, less payment processing cost) stood at ₹443 cr, up 428% (YoY). The company also reported a sustained increase in contribution profit, which increased 224% (YoY) and 16% (QoQ) to ₹843 crore. Paytm reported a revenue of ₹377 crore from its commerce and cloud services. Its rapidly growing lending business saw financial services revenue take up a bigger chunk of the total revenue — which at ₹349 crore now accounts for 18% of the company’s total revenue, compared to 8% in Q2FY22. Mentioning a long growth runway ahead for lending, Paytm shared insights into its loan distribution business. In Q2FY23, <keyword id="5988397" type="General" weightage="50" keywordseo="paytm-postpaid" source="Orion">Paytm Postpaid</keyword> disbursements stood at ₹4,050 crore, (449% YoY and 20% QoQ growth), while Personal loans disbursements amounted to ₹2,055 crore (736% YoY and 53% QoQ growth). Meanwhile, merchant loan disbursements stood at ₹1,208 crore (342% YoY and 46% QoQ) due to growth in devices business. “We continue to seek growth &amp; upsell opportunities as low penetration supports future growth potential, while working with our lending partners to maintain healthy credit quality,” said the company in its release. Disclaimer: This article is generated and published by the Insider Studios team. You can get in touch with them on insiderstudios@businessinsider.in

Paytm Q2 revenue surges 76% to ₹1,914 crore

<keyword id="6357120" type="General" weightage="20" keywordseo="paytm" source="Orion">Paytm</keyword> grew their revenues by 42% YOY in the third quarter of FY23 to ₹2,062 crore. The growth was driven by an increase in merchant subscription revenues, growth in loan distribution, and momentum in the commerce business. Given the timing of the accrual of the UPI incentive, there was no UPI incentive recorded in this quarter. Paytm’s focus on subscription services to create additional payment monetization continues to expand with the number of merchants paying subscriptions for payment devices like Paytm Soundbox and POS reaching 6.1 million at the end of January, an increase of 0.3 million in the month. The number of merchants paying subscriptions increased by one million in Q3 FY23. With their subscription-as-a-service model, the strong adoption of devices drives subscription revenues and higher payment volumes, while increasing the funnel for their merchant loan distribution. Paytm is seeing sustained traction in subscriptions and earning more than ₹100 per month per device. Further, Paytm has received additional incentives on select installations from partner banks, RBI and NABARD etc. Paytm’s founder and CEO Vijay Shekhar Sharma during the recent earnings call said that Paytm’s focus with merchants is not limited to just devices but includes various other subscription line items. The total merchant GMV processed through Paytm’s platform in Q3 FY 2023 aggregated to ₹3.5 lakh crore, marking a YoY growth of 38%. <keyword id="7656598" type="General" weightage="20" keywordseo="merchant-payments" source="Orion">Merchant payments</keyword> volume in the month of January was ₹1.2 lakh crore, growing 44% from a year ago. Paytm’s focus over the past few quarters continues to be on payment volumes that generate profitability for Paytm, either through net payments margin or from direct upsell potential. During the earnings call, founder and CEO Vijay Shekhar Sharma said that Paytm’s focus on merchant payments has created a scalable UPI revenue model in subscription. “I feel highly positive and inspired by the adoption of our device business, especially Soundbox which has led to significant scale in UPI acquiring,” he said. UPI has emerged as one of the key low CAC customers and merchant acquisition channels for us. Paytm’s registered merchant base expanded to 31.4 million at the end of December 2022. Their CEO Vijay Shekhar Sharma also mentioned that Paytm’s revenue from merchant business in the payments industry is particularly higher than every other peer company. “Somebody chose P2P, somebody chose P2M, we chose merchant business. Our acquiring side market share, which NPCI does not yet declare, once they start declaring, you will see how well Paytm is capitalized there over other UPI players, also standalone UPI players or other payment aggregators,” he added. As per the notification received from the Government of India on January 11, 2023, Paytm estimates that for Q1-Q3 FY 2023, it will receive ₹130 crore of UPI incentives in Q4 FY 2023. Paytm leverages their two-sided ecosystem of consumers and merchants and rich insights from their platform to cross-sell high-margin financial services and merchant services. Paytm enables their merchants with tech solutions that allow them to accept payments through a wide variety of instruments and by deploying subscription-based devices that help with reconciliations. Paytm also enables commerce and allows them to advertise, sell gift vouchers, deals and tickets. For consumers and merchants, Paytm offers various lending products such as Paytm Postpaid (BNPL), personal loans and merchant loans, with their financial institution partners. Paytm’s lending business continues to scale providing attractive upsell revenues. Their portfolio qualities have been demonstrated over multiple payment cycles. Paytm believes that upselling lending products is a scalable opportunity and sees a large profit pool in their loan distribution business. The penetration for merchant loans is 5.2% of device merchants. Paytm believes there is a long runway for growth as their payments consumer and merchant base offers a large addressable market for loan distribution. Disclaimer : This article has been reproduced from Paytm's blog. The opinions expressed are those of the organization and do not necessarily reflect the views of Business Insider India. For further details, you can get in touch with our team on insiderstudios@businessinsider.in

Here’s how Paytm built a scalable, revenue-generating UPI model with focus on merchant payments

<ul><li>Contribution Profit grows 197% (YoY) to ₹726 cr</li><li>Contribution margin increases to over 43% (YoY) from 27%</li><li>Device deployment increases to 3.8 million</li><li>Loan disbursal value rises 779% YoY to ₹5,554 cr</li></ul>Digital financial services giant One97 Communications that owns the brand <keyword id="6357120" type="General" weightage="100" keywordseo="paytm" source="Orion">Paytm</keyword> on Friday reported its Q1FY23 results, with 89% YoY revenue growth to ₹1,680 crore, while EBITDA (Before ESOP) loss reduced to ₹275 crore, marking an improvement of ₹93 crore (QoQ). The company’s contribution profit grew 197% (YoY) to ₹726 cr, leading to an increase in contribution margin to 43% of revenues in comparison to 35% in Q4FY22. Contribution margin has improved on account of increased payment profitability and higher mix of high-margin businesses. The company’s user engagement, measured by monthly transacting users (MTU), grew 49% (YoY) to 74.8 million during the quarter, while the total devices deployed increased to 3.8 million (2.8 million added in the past 12 months). This has resulted in a 101% (YoY) jump in Gross Merchandise Value (GMV), which stood at ₹3 lakh cr during the quarter. <div type="image" title="Paytm revenue" msid="93394055" hostid="261"></div> Paytm’s payments services revenue grew by 69% YoY (3% Q-o-Q), supported by rapid growth in user engagement, merchant base, use cases on the Paytm super app and subscription revenue from payment devices. Paytm undertook account level rationalization among online merchants to focus on profitable GMV. Furthermore, there was no UPI incentive recorded during the quarter. This has led to an increase in net payment margin to 35% from 17% (YoY) through reduction in payment processing charges, increase in subscription revenue, MTU growth on our platform and account level rationalization for online merchants. The company’s revenue from financial services grew 393% (YoY) during the quarter, led by massive growth in Paytm’s loan distribution business. During the quarter, Paytm disbursed 8.5 million loans, representing a growth of 492% YoY and 30% QoQ. The value of the loans disbursed stood at ₹5,554 cr, marking a growth 779% (YoY) of 56%(QoQ). Moreover, the company has now reached an annualized run rate of approximately ₹24,000 cr of loan disbursements through its platform, with significant upside potential from increasing penetration. Disclaimer: This article is generated and published by the Insider Studios team. You can get in touch with them on <a href="mailto:insiderstudios@businessinsider.in">insiderstudios@businessinsider.in</a>

Paytm’s Q1 revenue jumps 89% to ₹1,680 crore

In the current landscape of increasing disposable income and a surge in point-of-sale transactions on e-commerce platforms, the usage of credit cards has experienced a notable upswing. A glance at the Reserve Bank of India’s data reveals a consistent rise in credit card spending that has been reaching new highs each month. Leveraging these insights into customer behaviour trends, <keyword id="6357120" type="General" weightage="100" keywordseo="paytm" source="Orion">Paytm</keyword> has identified opportunities and strategically introduced suitable credit products. Among these innovations, the Paytm co-branded credit cards stand out – offering customers lucrative discounts on various categories, including travel and movie tickets. Currently, Paytm has forged valuable partnerships with HDFC Bank and SBI Card, two of India’s leading credit card issuers. These collaborations not only generate substantial upfront distribution revenue but also establish a steady lifetime usage fee stream. Users can access these exclusive cards by applying on <a href="https://paytm.com/loans-credit-cards/credit-cards/">the Paytm app</a>. Paytm’s co-branded credit card business has grown significantly both in terms of new card issuances as well as spends. As of June 2023, Paytm boasts of an impressive count of 7.5 lakh activated credit cards, marking an increase of 1.6 lakh cards in the quarter. This trend is expected to grow, fuelled by the robust potential of cross-selling among Paytm’s extensive user base, many of whom have already taken loans through their platform. During the earnings call for Q1FY24, Paytm’s Founder and CEO Vijay Shekhar Sharma, underscored the instrumental role played by banks and NBFCs in ensuring easy credit availability for customers. He also believes there is a huge portion of customers still pending to come on board. “You can see the growth in the credit card spends, you can see the growth on BNPL equivalent, whether it is a large ticket or a small ticket on the counter is the growth direction. While the debit side has plateaued is not what I would say. There is a large customer base still pending to come on board. But definitely, credit is adding the flare of extra revenue and it will add to the net bps margin continuously,” said Sharma. Moreover, Sharma envisions a future where credit may become a choice of payment for many. “India is at the cusp of the next payments revolution where credit will become the mainstream payment choice. Our users are already savvy on QR code-based payments and with RuPay credit cards working on UPI QR codes, transactions through mobile phones will get a further boost, marking a new era in digital payments,” he had said during the launch of Paytm SBI Credit Card. Notably, the credit card industry in India remains largely under-penetrated, offering huge opportunities for market penetration and expansion. The landscape is open for astute players like Paytm who are poised to redefine and elevate the credit card experience for the Indian consumer. Disclaimer : This article has been reproduced from Paytm's blog. The opinions expressed are those of the organisation and do not necessarily reflect the views of Business Insider India. For further details, you can get in touch with our team on <a href="mailto:insiderstudios@businessinsider.in">insiderstudios@businessinsider.in</a>

Paytm’s growing leadership in credit ecosystem – co-branded credit cards at 7.5 lakh

<ul><li>Unsecured <keyword id="35520" type="General" weightage="50" keywordseo="personal-loans" source="Orion">personal loans</keyword> account for 37% of Bajaj Finance’s loan book, while it is at 21% for Aditya Birla Capital and it is 27% for IIFL (standalone).</li><li>Tighter norms may impact <keyword id="6357120" type="General" weightage="80" keywordseo="paytm" source="Orion">Paytm</keyword>’s break-even timelines if there is a slowdown in loan disbursals.</li><li><keyword id="706950" type="General" weightage="50" keywordseo="aditya-birla-finance" source="Orion">Aditya Birla Finance</keyword> and IIFL may need to infuse capital after the November 16 tightening of capital norms by RBI. </li></ul>Reserve Bank of India’s <a href="https://www.businessinsider.in/finance/news/rbi-tightens-norms-on-personal-loans-for-banks-and-nbfcs-stock-reaction/articleshow/105277492.cms" data-type="tilCustomLink" target="_blank">crackdown on personal loan disbursals</a> by banks and non-banking finance companies will have a cascading effect on the sector. But the worst hit will be non-bank players as they will be hit on both asset and the liability sides. While they will have to pay higher rates while borrowing from banks and bond markets, they will also have to pass on higher costs to borrowers. This will slow down the rapid growth in their balance sheet, which has been driven by rapid growth in the disbursement of unsecured personal/consumer loans. According to analysts, non banking finance companies like Paytm and Bajaj Finance would be most affected by RBI’s move to tighten capital norms on unsecured loans and also loans disbursed to non banks. This will not only make lending more expensive for non banks but in many cases will also force them to raise more capital ahead of schedule. <keyword id="116253" type="General" weightage="80" keywordseo="sbi-cards" source="Orion">SBI Cards</keyword>, Bajaj Finance, IIFL and Aditya Birla have relatively higher proportion of unsecured loans on their portfolio and, therefore, tighter capital norms will impact them the most. Unsecured personal loans account for 37% of Bajaj Finance’s loan book, while it is 21% for Aditya Birla Capital and it is 27% for IIFL (standalone), according to Jefferies. According to Jefferies, SBI Cards can see an estimated.400 basis points cut in its Tier 1 capital adequacy ratio while Bajaj Finance can see 220 basis point hair cut to Tier 1 CAR. However, both NBFCs are well capitalised and have higher return on equity (low capital consumption). “IIFL (standalone entity) and Aditya Birla Capital can see a 50-80 bps haircut to Tier 1 capital, which can lower their Tier 1 to 13%/15%. IIFL may need to infuse capital in the standalone entity; at ABFL, next phase of capital raise may get advanced,” the global investment bank said in a report. in funding costs. SBI Cards faces highest drag on Tier I CAR and highest dependence on bank-funding. The tighter norms will not impact NBFCs but even fintechs like Paytm. Loan disbursals by fintechs will also slow down from the current levels as they may find it hard to raise funds and even pass on higher cost loans to consumers. Japanese investment bank Nomura says in a report, that in the past 18 months, nearly 25%-30% of incremental growth for NBFCs has come from unsecured retail. Any moderation in unsecured credit for NBFCs will hence have an impact on both growth and profitability for NBFCs in our view. Moreover, the regulatory action comes at a time when credit costs in these segments have started to inch up. For Paytm's lending partners, higher funding costs and increased capital requirements will affect product profitability in the buy-now-pay-later and personal loans segments. Non bank lenders like private banks may also start to improve their underwriting standards after this which will impact overall growth. Jefferies says: “We also watch out for the pricing environment and ability of Paytm to pass-through hike in funding costs. In our base case earnings, we forecast consumer loan disbursal growth to normalise from 90% in FY24 to 40% in FY25 and 35% in FY26. Any additional 10 percentage point slower disbursal growth (vs. base case) in FY25/26E can lead to 5-10% impact on lending revenues and ~2-3% impact on overall contributions, which may impact break-even timelines as well. Paytm may be able to compensate for this through faster ramp-up of its merchant financing business.” ALSO READ: <a href="https://www.businessinsider.in/personal-finance/news/the-dark-truth-behind-rbis-crackdown-on-easy-personal-loans/articleshow/105287366.cms" data-type="tilCustomLink" target="_blank">The dark truth behind RBI’s crackdown on easy personal loans</a>

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