“I believe that UPI is moving towards monetisation…different payment instruments will come on UPI. (The prepaid wallet instrument) has an interesting MDR (merchant discount rate) structure…If our Paytm wallet is being used on somebody else’s QR, the merchant will have to pay us,” Sharma told analysts.
“QR payments from bank accounts are free and will remain free in the long term, but other payment sources like wallets, which are getting visibility benefits from interoperability, will also generate revenue for us,” he added.
In March this year, the National Payments Corporation of India (NPCI), which operates the UPI railroad, had set the interchange fee at 1.1% for merchant transactions initiated using a Prepaid Payment Instrument (PPI) such as mobile wallets on the UPI network.
Also read | Paytm parent One 97 Communications posts $1 billion in revenue for FY23
The Reserve Bank of India (RBI) had also last year announced that UPI can be linked to credit cards issued by banks on NPCI’s RuPay network.
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Sharma also announced that Paytm is planning to launch a RuPay credit card in partnership with a bank. Paytm’s renewed focus towards the UPI assumes significance, as it has so long resisted from pushing the pedal on the payment infrastructure, due to lack of monetisation channels. This softness has also led to its arch-rival PhonePe taking the pole position in the UPI circuit, commanding as much as 47% market share in March. Paytm is a distant third and commanded only 15% of overall UPI volume in the country in March.
Paytm’s interest in pushing UPI-based channels also became clear after the company launched UPI Lite, becoming one of the first major payments platforms to do so. This incentivises Paytm to push both its UPI and wallet business to gain user revenues on payments.
“Core thing is that different UPI payment modes will have different payment charges…somebody offering services to the merchants could also absorb the merchant’s burden. Let me not say whether the merchant will be charged or not, let me say that issuers will fetch charges,” Sharma said.
Also read | UPI merchant payments to reach $1 trillion by FY26: Report
During 2022-23 (April-March), Paytm’s parent company One 97 Communications Ltd received Rs 182 crore in UPI incentives from the government. The company’s net loss for the March quarter narrowed to Rs 167.5 crore from Rs 762.5 crore a year earlier, and Rs 392.1 crore in the December quarter.
Quarterly revenue from operations grew 13% sequentially and nearly 51% from a year earlier to Rs 2,334.5 crore. In the core payments services, revenue rose 41% on-year to Rs 1,467 crore.
For the year ended March 31, the Noida-based company posted a loss of Rs 1,776.5 crore on total revenue of Rs 8,400 crore (about $1.03 billion). While the loss has narrowed 26% from a year earlier, revenue has grown almost 60%. Revenue from operations for the company during 2022-23 stood at Rs 7,990.3 crore.
