On track to achieve operating profitability by September 2023: Paytm

One97 Communications, the parent company of Paytm, has prioritised the payments and distribution of lending products businesses while allocating the resources, as the company aims to achieve operating profitability by the second quarter of FY23.

The digital payments company presented the annual report for FY 2021-22 for the first time as a publicly listed company. Vijay Shekhar Sharma, the founder and Chief Executive Officer (CEO) of Paytm said the company has recorded rapid growth in payments and a huge scale-up in lending and payments devices businesses.

“The core of Paytm’s business model is to acquire consumers and merchants for payments services, and upselling them financial services, by leveraging our distribution, collections and our transactional and behavioural insights,” Sharma said.

He said Buy Now Pay Later (BNPL), which allows our credit to consumers at the point of sale, had become a consumer favourite. “Our lending business continues to scale providing attractive upsell revenues,” the company said in its annual report.

Paytm offers personal loans, merchant lending, and BNPL options through partnerships with financial institutions.

Paytm’s lending partners disbursed over 15.2 million loans through our platform in FY2022, a 478 percent growth over FY2021. The value of loans grew 441 per cent to Rs 7,623 crore in FY2022, from Rs 1,409 crore in FY2021. “Our lending business continues to scale providing attractive upsell revenues,” the company said.

“Paytm app now has more and more users coming on to our platform for their everyday usage without requiring any incentive from us. We are focused on further expanding our payments network by acquiring quality customers and merchants with high activity rates and transaction frequency,” Sharma said.

Paytm’s Monthly Transacting Users (MTU) saw a growth of 41% Year-on-Year, surpassing 70 million during Q4 FY 2022. The company said the adoption of payment use cases on our platform resulted in the rise.

Sharma said the merchants were increasingly ready to pay for technology that makes digital payments easier and trusted. “We are increasingly seeing merchants opt for devices, whether Paytm card machines or Soundbox, on their counter and this adoption of devices by merchants is almost certainly going to further accelerate.”

He added that the company focuses on expanding its role from QR payments to devices to credit. “Once merchants start accepting payments through us, they start to become eligible for lending from the lenders that we have partnered with, who are able to rely on our distribution and merchant insights, otherwise unavailable to them.”