Paytm sees regulatory action affect profitability and revenue, increases focus on compliance

Digital payments and e-commerce business Paytm expects to see an impact on both its revenue and profitability following the regulatory scrutiny it faced at the beginning of the calendar year which resulted in a pause on a number of its services.

“We expect near-term financial impact to our revenue and profitability due to disruptions faced in our business in Q4,” wrote Paytm’s CEO Vijay Shekhar Sharma in a letter to shareholders, accessed by ET Tech. “This includes steady state impact due to pausing of [the] Paytm Payments Bank Limited wallet. We had also paused a few other payments and loan products to our customers during the last quarter, and I am happy to share that many such products have been restarted or in the process of starting soon.”
 
The business has also pledged to increase is focus on compliance with Indian financial regulations to ensure that it does not face similar issues in the future, ET Bureau reported. This follows the Reserve Bank of India’s decision to ask Paytm Payments Bank Limited to cease offering its basic banking services from the end of February this year. The business was subsequently granted a 15 day deadline extension.
 
Paytm saw its net losses increase threefold year-on-year in the March financial quarter to total Rs 550 crore. On March 31, 2024, the business reported a cash balance of Rs 8,650 crore which was down from its balance of Rs 8,901 at the end of December 2023.