How UPI has become a strong revenue source for fintech pioneer Paytm

tech.hindustantimes.com:

In the Indian financial ecosystem, Paytm became a trendsetter when it launched its mobile wallet and QR payments almost a decade ago. From ‘scan and pay' to ‘tap and pay', Paytm's payment solutions have changed the way everyday transactions are carried out.

But what truly sets Paytm apart is its diverse business model and a wide array of services it offers while its competitors are engrossed only on UPI payments so far and are now slowly following Paytm's footsteps into other areas. In fact, OCL's associate Paytm Payments Bank is a leader in UPI P2M payments, as the largest acquiring and beneficiary bank.

During the recent earnings call, Paytm Founder and CEO Vijay Shekhar Sharma highlighted that Paytm's focus on merchant payments instead of consumer led UPI payment 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 and various subscriptions led revenues that you've seen our month-on-month numbers,” Mr Sharma said.

The fintech giant has achieved operating profitability in Q3FY23 with EBITDA before ESOP cost at ₹31 Crore, much ahead of its September 2023 timeline. The company's revenues grew 42% YoY to ₹2,062 Cr driven by an increase in merchant subscription revenues, growth in loan distribution, and momentum in the commerce business. As per Government's notification of January 11, 2023, the company estimates that for Q1-Q3 FY 2023, it will receive ₹130 Cr of incentives in Q4FY23.

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