Paytm's business update: Average monthly transacting users 20% up, merchant payment volumes rise 43%

The tech innovator recently launched three new devices – Paytm Card Soundbox, Paytm Pocket Soundbox and Paytm Music Soundbox – further cementing its market leadership in in-store payments. Its latest Paytm Card Soundbox is India’s first Soundbox that accepts both mobile as well as debit and credit card payments across Visa, Mastercard, American Express and RuPay networks. With Paytm Music Soundbox, merchants can connect their phones to the device through bluetooth and listen to music, match commentary etc.

The company has seen a sustained growth in merchant payments volume with the total merchant GMV processed through the platform for July and August was Rs 3 lakh crore ($36.3 billion), marking a YoY growth of 43 percent.

Paytm said, “We continue to see increase in GMV of non-UPI instruments like EMI and cards. Growth in payments volumes drives profitability for us, through net payments margin and/or from direct upsell potential.”

The fintech giant’s loan distribution business, in partnership with top lenders, continues to witness accelerated growth with disbursements through the platform for the two months ended August 2023 growing 137 percent YoY to Rs 10,710 crore($1.3 billion). The number of loans disbursed through the Paytm platform for the quarter till date jumped 47 percent YoY to 88 lakh. With a focus on calibrating growth to tighten credit quality of loans disbursed through its platform, Paytm said that it has been successful in improving the credit quality for Paytm Postpaid for which ECL has reduced to a range of 0.65 percent - 0.85 percent from a range of 0.75 percent - 1.00 percent in Q4FY23.

It further added that portfolio management of its lending partners remains a key focus and its growth is likely to be subdued till the industry outlook improves.

Paytm reported a 39 percent YoY growth in revenue from operations to Rs 2,342 crore in its recently announced Q1FY24 results (April-June 2023). It has attributed this growth to be driven by an increase in merchant subscription revenue, jump in GMV, and growth in loan disbursements. The company reported an operating profit for the third straight quarter. Its EBITDA before ESOP cost has improved to Rs 84 crore as compared to Rs 52 crore in Q4FY23 (excluding UPI incentives).