Paytm’s merchant base has expanded to nearly 30 million as of Q2FY23, with more businesses across the spectrum now joining the platform for accessing the most diverse range of offerings including payment services, subscription devices and even loans.
As the pioneers of QR and mobile payments in India, the company has built a strong digital ecosystem for merchants – from the smaller shopkeepers to the biggest enterprise – and enabled them to achieve stronger growth in their digital journey.
Today, merchants intuitively understand the value of digital payments and they believe in the solutions the company is offering to make their digital payments journey easier and trusted. The company continues to see merchants increasingly opt for devices such as Paytm Soundbox and PoS on their counter, with over 5 million deployments as of October 2022.
Paytm has empowered the merchant partners across the country with pioneering tech solutions that allow them to accept payments through a wide range of instruments and also by deploying subscription-based devices that help them with day-to-day payments. Simply put, the company has created a pyramid system that facilitates entry-level merchants to Omni-channel merchants.
Entry level merchants can use a free mobile QR to accept payments, typically using Paytm Payment Instruments or UPI. Small retailers or offline merchants can then upgrade to Soundbox devices which allow real time voice verification and better reconciliation for merchants, hence generating subscription revenue. The mid-sized and large retailers also use Paytm’s POS devices/card machines which enables them to accept mobile and card payments, thus generating both subscription revenues as well as MDR for us. For Online and Omni channel merchants, the company offers a robust payment gateway product allowing merchants to reliably accept payments across all channels, thus generating MDR revenue and platform fees. Additionally, online merchants can use the Paytm app to collect payments, through which the company earns MDR and platform fees. The company also enables commerce for merchants and allows them to advertise, sell gift vouchers and tickets.
Paytm Payment Services to Merchants includes revenues from the company’s comprehensive offerings of online and in-store payment acceptance services. Merchants pay MDR for cards, wallet, net banking payments, and subscriptions for devices. The government pays incentives for UPI P2M payments. This grew 56% y-o-y to Rs 624 crore in Q2FY22.
Meanwhile, merchant loans offered on the platform in partnership with financial institutions witnessed wider adoption in Q2FY23 with higher ticket size. The total value of merchant loans in the quarter grew 342% y-o-y to Rs 1,208 crore, while volumes surged by 254% y-o-y. This was boosted by growth in the devices business, as more than 85% of loans disbursed were to merchants who also have Paytm devices. In addition, repeat loans continue to see a healthy take up with 50% of merchants having taken a loan more than once. The company also offers commerce and cloud services to merchants, where revenue during the quarter grew 55% y-o-y to Rs 377 crore.
As the payment revolution continues in India, Paytm remains committed to empowering merchants across the spectrum with the diversified ecosystem of innovative solutions and carry on with the company’s mission to drive greater financial inclusion in India.
