India’s Paytm gets approval to resume payments growth

Paytm, one of India’s leading financial services companies, has received regulatory approval to resume adding new UPI payments users, after an eight-month restriction on many of its operations.

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

The Reserve Bank of India ordered Paytm to cease many operations of its affiliated payments bank earlier this year due to repeated rule violations. NPCI, the regulatory body that oversees UPI, approved Paytm’s application on Tuesday.

Analysts at Bernstein and Goldman Sachs said the approval is an “important” development that will help revive Paytm’s transactional user growth. The number of users transacting monthly on Paytm fell to 68 million last month from 100 million in December.

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