Paytm (One 97 Communications Ltd) remains confident in the strength of its core business model and does not rely on the Payments Infrastructure Development Fund (PIDF) to remain profitable, even as it welcomes all initiatives aimed at strengthening the digital payments ecosystem, said its Founder and CEO Vijay Shekhar Sharma.
PIDF is an initiative launched by the RBI on January 1, 2021, to accelerate the adoption of digital payments in India, particularly in tier-3 to tier-6 cities, northeastern states, and rural areas. It subsidizes the deployment of physical Point of Sale (PoS) and digital payment (QR code) infrastructure, with the scheme extended until December 2025.
“While the industry welcomes every initiative from the government or other entities, our business model is not built around grants,” Sharma said during a earnings call. “We are not here to take grants as our profit or revenue.”
According to him, Paytm’s core revenues continue to come from merchant subscriptions and from merchants who avail credit through the platform. The PIDF initiative, he noted, was largely targeted at merchants who were not creditworthy, whereas Paytm focused on deploying services to merchants who could be converted into creditworthy customers.
“Our model is now well established. We offset costs through subscription income and cross-selling of financial services. That’s why we don’t see PIDF as a requirement in our business model,” he said.
Emphasising Paytm’s strategic focus, he said the company does not operate on a device deployment or rental-led model and does not view capital expenditure as a revenue stream. “We are strictly about payments and financial services, and that is sacrosanct,” he added.
He also highlighted the steady growth of digital gold transactions on the platform, calling it a consistent customer-retention product rather than a margin-driven bet. “Digital gold works well. Customers are comfortable with gold, and daily transaction volumes are rising. It also helps lock in customers for the long term.”
Meanwhile, Paytm CEO Madhur Deora said the company’s Buy Now Pay Later (BNPL) offering had seen strong early traction. “In just three months since launch, we have crossed one lakh customers. Within six months, we expect disbursals to cross ₹100 crore,” he said, noting that the pace of adoption was faster than the company’s earlier Postpaid product.
Deora also confirmed that Paytm plans to reintroduce its wallet, strengthening its payments and financial services ecosystem further.
Sharma said that the company begun detailing a wide range of operating data to the market, even as revenue and profit momentum continue to improve.
“While we do see revenue and profit momentum growing, it is important to remember that the business is still in a very early phase and the customer acquisition remains the key competitive focus in the market.”
Over the longer term, the emphasis will shift towards monetisation, with the stated objective of building a sustainable, free cash–generating business within its payments and financial services operations, and then scaling it to the next stage of growth, he said.