Technology for MSMEs: Digital payments company Paytm on Monday reported 190 per cent year-on-year (YoY) growth in the number of merchants paying subscription for its payment devices (PoS terminals and soundboxes) during the third quarter of the current fiscal. The company, in an exchange filing on Q3 operating performance update, reported growth from 2 million devices or merchants in the quarter ending December 2021 to 5.8 million as of December 2022, an addition of 3.8 million devices over the year. Quarter-on-quarter, Paytm added 1 million devices from 4.8 million in the quarter ending September 2022. The payment devices confirm payments through voice alerts to merchants.
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The growth comes on the back of Vijay Shekhar Sharma-led Paytm’s focus on creating an additional payment monetization stream beyond merchant discount rate (MDR) — the rate at which merchants are charged for accepting digital payments through different payment methods.
“Our focus on subscription services continues to expand. We continue to strengthen our leadership in offline payments, with 5.8 million merchants now paying subscription for payment devices. With our subscription as a service model, the strong adoption of devices drives higher payment volumes and subscription revenues, while increasing the funnel for our merchant loan distribution,” the company said in its filing.
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Moreover, the company also reported growth in merchant gross merchandise value (GMV) which Paytm refers to the total value of payments made to merchants through transactions on its app, through Paytm payment instruments or through its payment solutions and excludes any consumer-to-consumer payment such as money transfer. During the December quarter, the merchant GMV processed aggregated to $42 billion, growing 38 per cent from $30.3 billion during the December quarter of FY22.
“Our focus over the past few quarters continues to be on payment volumes that generate profitability for us, either through net payments margin or from direct upsell potential,” Paytm said.
The December quarter also reported a 137 per cent growth in loans to 10.5 million from 4.4 million in the year-ago quarter. The amount involved in these loans grew 357 per cent to $1.20 billion from $264 million during the said period. “Our loan distribution business (in partnership with top lenders) continues to witness an accelerated growth with disbursements through our platform at Rs 3,665 crore in the month of December, growing 330 per cent YoY,” the company added. The loans disbursed included both consumer loans and merchant loans.
