Financial services

Paytm’s strong financial services now account for 18% of total revenue

Reaffirming its dominance as India’s leader in digital payments and financial services, Paytm on Monday reported 76% year-over-year (YoY) growth in its overall revenue for Q2FY23. In its press release filed with the stock exchanges, the company pointed out that financial services accounted for 18% of the total revenue generated during the quarter, mainly due to stronger growth in the loan distribution business.

The turnover of the company in the activity ‘Financial Services and Others’ amounts to 349 crore in Q2FY23, up 293% yoy and 29% qoq, supported by provisioning and collection revenue in the loan distribution business, which offers “huge growth opportunity with a attractive profitability” and greater penetration scope in the future.

The growing contribution of Paytm’s loan distribution business to total revenue is clearly visible, with 9.2 million loans disbursed in the quarter, up 224% yoy and 8% yoy quarterly. The total value of these loans was 7,313 crore, registering an increase of 482% YoY and 32% QoQ. Thanks to this, the annualized disbursement rate of the company has reached an impressive level 34,000 crores.

Paytm’s loan distribution product portfolio, consisting of Paytm Postpaid, Personal Loans and Merchant Loans, has grown in popularity over the past few quarters as adoption grows across the country.

Paytm Postpaid Disbursements to 4,050 crore saw a massive increase, rising 449% YoY and 20% QoQ. The growing popularity of Paytm Postpaid is marked by the registered user base which now exceeds 6 million and is widely accepted by over 15 million online and offline merchants. The loan product also continues to present significant cross-selling opportunities for the company in high-margin products such as personal loans and credit cards.

Supported by stronger postpaid adoption, the company reported a massive increase in personal loan disbursements, amounting to 2,055 crore in Q2FY23, up 736% YoY and 53% QoQ. The company noted that 40% of disbursements were made to existing postpaid users. The average ticket size for personal loans also increased 7% quarter-on-quarter to around 1,10,000 with an average seniority of 14 months.

Similarly, merchant loan disbursements increased by 342% YoY and 46% QoQ to reach 1,208 crores for the quarter. This was spurred by the company’s strengthened leadership in the offline payments space, as 85% of loans disbursed were to merchants with devices.

Paytm’s revenue from financial services is expected to contribute a higher percentage of overall revenue in the future as all three loan distribution products experience greater penetration among citizens. The company believes there is a “long avenue of growth ahead of it” and it will continue to seek growth and upsell opportunities as low penetration supports its future growth potential.

Disclaimer: This article was produced on behalf of Paytm by HT Brand Studio.

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