India’s Paytm wins approval to resume payments growth

Paytm, a leading Indian financial services firm, has received regulatory approval to resume adding new UPI payments users, following an eight-month restriction on many of its operations.

UPI, which processes over 15 billion monthly transactions, dominates India’s online payments. Walmart-owned PhonePe and Google Pay process about 87% of UPI transactions, whereas Paytm’s market share has shrunk from 13% to 8% after this year’s central bank restrictions.

The Reserve Bank of India ordered Paytm to cease many of the businesses at its affiliate payments bank early this year over repeated violation of rules. NPCI, the regulatory body that oversees UPI, approved Paytm’s application on Tuesday.

Analysts at Bernstein and Goldman Sachs said the approval is a “significant” development that will help revive Paytm’s transacting user growth. Paytm’s monthly transacting users has fallen to 68 million as of last month from 100 million in December.

Paytm on Tuesday reported revenue of $197.4 million in the quarter ending September, up from $178.6 million in the previous quarter but down 34% year-on-year from $299.5 million. Profit in the quarter climbed to $110 million after factoring in a one-time gain of $160 million from the sale of entertainment ticketing biz to Zomato.