![]() ![]() “UPI is a great customer acquisition tool, and Paytm needs this to keep firing so that more and more customers use Paytm actively,” said one the executives quoted earlier in the story.Ĭurrently, Paytm has around 82 million users active on a monthly basis (over the last year). The RBI has mandated every payment company offering services to online merchants to comply with its payment aggregator and payment gateway guidelines.Īlso, Paytm Payments Bank is awaiting some clearances from the regulator to resume account opening again.Īlso read: RBI grants in-principle approval to 32 entities for payment aggregator licence Once the government clears this investment, Paytm can apply for the licence afresh. The RBI has asked Paytm to get clearance from the central government on the foreign money that it pumped into its payment subsidiary. And then, in November the central bank stopped onboarding of new online merchants on the Paytm payment gateway. ![]() In March 2022, the RBI asked Paytm Payments Bank to stop onboarding new customers. The fact that both Paytm Payments Bank and the Paytm payment gateway cannot onboard new clients is not helping at this point. And that is why the payments major is innovating on UPI across UPI Lite, UPI 123, and credit cards on UPI in the hope that it can keep drawing new users into its ecosystem. ![]() While financial services is Paytm’s fastest growing revenue channel, its payments business needs to keep pace, too. Given that it cannot lend on its own books, Paytm will always have to operate in the 4% margin game and look to aggressively disburse loans in the hope of getting a strong topline. As an NBFC with massive equity backing and the capabilities of its top management team, Paytm could have raised large amounts of debt and used that for onward lending. In all this, Paytm’s payment bank licence could become the actual hindrance. Perhaps that question will be answered over the next few quarters. The founder quoted above wondered up to what percentage Paytm could expand the pie without getting into risky segments. Currently Paytm has touched 4% of its monthly transacting users for Postpaid loans, 0.8% for personal loans and 5% for merchant loans. Paytm is betting big on its massive user base of around 350 million and very low penetration for continuous scaling of its disbursal game strategy. “As per industry standards, Paytm is pretty much on the higher side, but the question is for its topline to sustain, Paytm needs to constantly expand its creditworthy user base,” said the founder of a new-age NBFC that operates in the same space. Add to that certain collection margins of around 0.5% to 1.5%.Ī recently released industry report on Andromeda, one of the largest agent networks for banks and NBFCs, said that Paytm makes around 3.5% to 4% of the loan disbursed as commission for every loan sourced for its NBFC partners. Paytm currently gets around 22% of its overall revenue from financial services, which includes three major business lines: BNPL product Paytm Postpaid, merchant loans meant for businesses that own a Paytm device for payments, and thirdly, personal loans for Paytm users.Ĭurrently Paytm operates at around 3.5% to 4% commission in the loan disbursal business. “Fintechs are vying for the NBFC licence to stay compliant with the regulator’s digital lending guidelines, but Paytm, as long as it is a payments bank, will have to operate as a loan sourcing platform,” said one of the executives quoted earlier. ![]() Cred, which operates at the premium end of the customer segment, also has an inhouse NBFC today. Its competitor BharatPe, which offers postpaid as well as merchant loans, recently acquired a Mumbai-based NBFC. Interestingly Paytm as a payments bank cannot lend from its own books. Additionally, they are also partnering with on-ground collection agencies to build physical collection capabilities,” said one of the persons in the know cited earlier.Īccording to data shared by the company, across personal loans, postpaid loans and merchant loans, Paytm has a collection efficiency of anywhere between 25% to 30% (for loans that are due for 90 days or more).Īlso read: UPI Lite has gained traction on Paytm, says fintech company “Paytm has capabilities to send collection reminders and collection requests, and track repayments. But over the next 12 months, Paytm will see this line item expanding as it disburses more loans and collects more.Īnd this is where Paytm’s acquisition of debt collection platform Creditmate has come to bear fruit. Given that last year Paytm was originating much lower volumes, the contribution of the collection business remains negligible in INR terms. For Paytm Postpaid, a buy now pay later (BNPL) offering, it is between 0.5 and 0.75%. The take rate on this hovers between 0.5% to 1.5% depending on the type of loan. Also read: Paytm CEO Vijay Shekhar Sharma expects more revenues from expanding UPI use cases ![]()
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