Paytm sees no impact of reduced UPI incentives on path to profitability

Company announced launch of first NFC card soundbox

One97 Communications (OCL), which operates brand Paytm, anticipates no impact on its path to profitability from the government’s reduction in incentives for small-ticket Unified Payments Interface (UPI) transactions in the recent Budget.

This comes as the company’s founder and chief executive officer (CEO) Vijay Shekhar Sharma had previously indicated that it will deliver one profitable quarter in this financial year (FY25).

“We remain committed to do the same (deliver a profitable quarter this financial year) without UPI incentive. So, it comes up to that,” Sharma said.

Sharma was talking at the launch of 'Card NFC Soundbox' machines.

In Budget 2024, the government allocated Rs 1,441 crore for incentivising fintech firms to facilitate small-value BHIM-UPI transactions (person-to-merchant) and RuPay debit cards.

 

This is 42 per cent lower than the Rs 2,482 crore that the Centre earmarked in the previous Budget for 2023-24.

In a call with analysts following the first quarter (Q1 FY25) results, Sharma had said the fintech major hoped to receive a sizable UPI incentive this financial year.

“I do believe that last quarter (Q4 FY25), there will be a lump sum UPI incentive, hopefully (this will be) sizable again this year. We will definitely love to have that quarter profitable. We are looking at profitability without that extraordinary one-time item,” he had said.

On Tuesday, Sharma announced the launch of a new Paytm NFC Card Soundbox. The soundbox is an addition to the firm’s suite of audio-based payment acceptance devices. It offers the facility to accept payments via near-field technology (NFC) and a quick-response (QR) code. The device can last for 10 days on a single charge.

Sharma said the new device will be available at a similar rental of Rs 150 a month as the old devices. 

Merchants can ask for an upgrade of their existing device without paying any extra amount, he added.

The company's stock price was up 4 per cent during intraday trading. The stock closed at Rs 495.95 per share on the NSE.