Paytm CEO Vijay Shekhar Sharma, addressing shareholders during the company's annual general meeting on Thursday, said the company intends to reapply for a payment aggregator (PA) licence before the Reserve Bank of India (RBI) in due time. "The government recently approved an FDI investment, also known as PN3 approval, for us. Now we will apply for a payment aggregator licence before the RBI in due course," says Sharma.
The Paytm CEO says the last six months were full of learnings for the fintech. “We took a deep dive into understanding business and compliance process, and the way we work.” The RBI in January had ordered Paytm Payments Bank (PPBL), Paytm’s former associate entity, to stop services from March 2024, affecting the company’s overall business severely.
Sharma says now the company is moving forward with a “compliance first business” approach. “...Which takes care of regulations fully and in letter and spirit."
He said Paytm has now scaled its entire business into a “merchant payment-centric and cross-selling financial services model”. “In this business model, the merchant buys a device, soundbox, subscription, and sometimes credit card and other payment instruments, and pays related fees to us. So our payment business model is a robust and scalable.”
He says all rickshaw drivers, plumbers, tuition teachers, etc., are merchants for Paytm. “If we see them as merchants, there is a 10 crore customer opportunity in India, currently. We have catered to around 4 crore people so far. I believe we can leave an impact in areas of merchants, tech, and payments segments,” says Sharma.
He says cross-selling of financial services is the other vertical the company is focussing on. “With our payment business, we cross-sell loans to customers. We work with known banks and NBFCs who provide loans to merchants and certain fees to us. So it's a fees business model and is a scalable business of financial inclusion."
Sharma says Paytm is committed to 'making for India'. “For India's merchants, for small businesses. What we make in India should be of global standard.”
On the emergence of AI, he said people and companies, who will use it in their life and businesses, will move forward. "We commit to making AI a part of the core business. Our team will use AI in tech, product, business and operations. For now, we will use it in our core payments and cross-selling businesses."
In August, the finance ministry approved the company's downstream investment in its payment arm, Paytm Payments Services (PPSL). The company said, at that time too, that with this approval in place, PPSL would proceed to resubmit its PA application.
Recent months have been challenging for One 97 Communications, the parent company of Paytm, due to stringent action taken by India’s banking regulator. The fintech major reported a net loss of ₹840 crore in the first quarter of this financial year, up from ₹357 crore a year earlier, largely due to the RBI's restrictions. Its revenue fell by 36% to ₹1,502 crore in Q1 FY25, down from ₹2,342 crore in the same period last year.
