Paytm will make operating profits by Sept 2023: Vijay Shekhar Sharma

Paytm's Vijay Shekhar Sharma says company is seeing excellent momentum and is on track to achieve operating profitability

One97 Communications, the parent company of Paytm, has prioritised the payments and distribution of lending products businesses as the company aims to achieve operating profitability by the second quarter of FY23. The digital payments company presented the annual report for FY22 for the first time as a public-listed company.

Vijay Shekhar Sharma, 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 payment devices businesses.

“The core of Paytm’s business model is to acquire consumers and merchants for payment services, and upselling services to consumers. This is by leveraging our distribution, collections. 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 favourite offering.

“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 the platform in FY22, a 478 per cent growth over FY21.

The value of loans grew 441 per cent to Rs 7,623 crore in FY22, from Rs 1,409 crore in FY21. “Our lending business continues to scale providing attractive upsell revenues,” the company said.  

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

Paytm’s monthly transacting users (MTU) saw a growth of 41 per cent year-on-year (YoY), surpassing 70 million during Q4 of FY22. The company said the adoption of payment use cases on its 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. This adoption of devices by merchants is almost certainly going to accelerate further.”

He added that the company is focusing on expanding its role from QR payments to devices and credit.

“Once merchants start accepting payments through us, they start to become eligible for lending from the lenders that we have partnered with. The lenders are able to rely on our distribution and merchant insights, otherwise unavailable to them.”