Paytm's Strategic Moves and Operational Growth
One97 Communications, the fintech company operating under the Paytm brand, disclosed a narrowed loss of Rs 221.7 crore for the October-December quarter, as reported in a filing on Friday. This represents a significant improvement compared to the Rs 392.1 crore losses reported in the same period last year.
The company witnessed a robust growth in revenue from operations, surging over 38% year-on-year to Rs 2,850.5 crore in the third quarter of FY2023-24. Paytm attributed its Q3 performance to "significant growth in subscription revenue, improved margins, and increased payment business revenue."
In a strategic move, Paytm's board approved a Rs 100 crore investment in Gujarat International Finance Tec-City (GIFT City) to establish a global financial ecosystem. Leveraging its success in real-time payments, Paytm aims to streamline cross-border remittances with efficient, AI-powered solutions. Additionally, the company plans to set up a development center in GIFT City to create a technology backbone for these solutions.
Operational Expansion and Merchant Engagement
According to the Q3 report card, the number of merchants subscribing to Paytm's payment devices reached 1.06 crore as of December 2023, marking a year-on-year increase of 49 lakh. The payments business exhibited significant growth, with revenue escalating by 45% year-on-year to Rs 1,730 crore, and the net payment margin witnessing a 63% year-on-year increase to Rs 748 crore.
Merchant payments volume (GMV) grew by 47% year-on-year, reaching Rs 5.10 lakh crore. Revenue from financial services and other segments climbed by 36% year-on-year to Rs 607 crore, driven by personal loans, merchant loans distribution, and increased revenue from the insurance broking business.
Focus on Innovation and Customer Acquisition
Paytm emphasized its commitment to introducing new use cases, including Credit on UPI and Autopay, to stimulate monetizable incremental customer acquisition. In the financial services segment, the company aims to broaden high-ticket loans by pursuing new lending partners.
Simultaneously, Paytm is extending its offerings in embedded insurance and merchant insurance, actively cross-selling equity trading to the Paytm consumer base. In the December quarter, Paytm disbursed loans worth Rs 15,535 crore, marking a significant 56% increase. The total number of unique users availing loans through the Paytm platform increased by 44 lakh over the past year, reaching 1.25 crore.
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