Paytm’s loss widened at the same time as income declined by 36% year-on-year because the once-poster star of Indian startup ecosystem continues to grapple with the Reserve Financial institution of India’s clampdown that considerably curtailed its funds financial institution enterprise unit.
The Noida-headquartered agency’s loss greater than doubled to $100 million within the quarter ending June, it disclosed Friday. The agency’s income shrank to $179.5 million, down from $280 million in the identical quarter final yr and $271 million within the quarter ending March in 2024.
The decline in income follows the Reserve Financial institution of India ordering Paytm earlier this yr to stop most operations at Paytm Funds Financial institution, an affiliate of the monetary companies agency that processed a lot of its transactions. That is the primary quarter the place the total influence of RBI’s clampdown is seen on Paytm’s enterprise.
Paytm’s loss within the quarter ending June final yr stood at $42 million and $65.8 million within the quarter ending March this yr.
Shares of Paytm initially declined as a lot as 4.4% however then rebounded to above the day’s opening, suggesting the retail buyers had already priced within the influence. Paytm additionally warned of declining revenues final quarter.
Paytm pioneered the cellular funds push of India, courting tons of of hundreds of thousands of individuals to its pockets app and enabling lots of them to do their first digital transactions. However the fortune of the agency has dwindled in recent times amid rising competitors from Walmart-backed PhonePe and Google Pay.
PhonePe and Google Pay course of greater than 86% of all transactions on UPI, a state-backed interoperable funds community. UPI has turn out to be the preferred means Indians transact on-line, processing greater than 11 billion transactions every month. The surge in UPI’s recognition has harm the relevance of the pockets enterprise and client’s reliance on utilizing card networks operated by Visa and Mastercard.
Paytm — which depends closely at present on serving retailers, together with issuing them credit score — mentioned it’s persevering with to see a rebound in that a part of the enterprise, which it mentioned is “demonstrating our path to restoration.”
An organization spokesperson added: “This additionally signifies the continued confidence of our service provider companions and shoppers on our platform, and we’re grateful for the belief of our stakeholder.”
The Indian central financial institution barred Paytm’s Funds Financial institution from providing many banking companies, together with accepting recent deposits and credit score transactions throughout its companies earlier this yr, citing “persistent non-compliance” with guidelines.
The transfer pressured Paytm to ink partnerships with different banks in India for continuity of a few of its core companies.
