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Payments firms slash cashbacks, incentives on funding drought

Economic Times

Economic Times · 8m ago

Payments firms slash cashbacks, incentives on funding drought

Consumer payment companies like PhonePe, Paytm, Amazon Pay, and Cred have significantly reduced their marketing spends and customer incentives. This reduction can be attributed to the maturing digital payments market in India, with cashbacks now being offered in a more systematic and structured manner. Startups are focusing on conserving cash and building towards profitability and sustainability. Despite permission to onboard new customers, Paytm remains focused on controlling costs. Amazon Pay has reduced its marketing expenses by 23% in FY2024 compared to the previous year. Cred, as a new entrant, has also cut down on marketing spends. With market stability, industry insiders are watching the emergence of Bhim and the possibility of market domination battles.

Related News

Morgan Stanley to slash 13% investment banking jobs in Hong Kong and China

Livemint

Livemint · 1y ago

Morgan Stanley to slash 13% investment banking jobs in Hong Kong and China

Morgan Stanley is planning to cut about 50 investment banking jobs in the Asia-Pacific region, with the majority of the reductions being in Hong Kong and China. The planned cuts represent about 13% of the 400 bankers in the region, excluding Japan. This move comes as China's economy is struggling with a real estate crisis and doubts over growth. The final size and timing of the cuts are subject to change. Other global financial firms are also reducing expenses and cutting investment banking staff in Asia due to deteriorating US-China relations and a deal drought.

Get QR code from another bank: RBI to merchants on Paytm Bank deadline

Inshorts · 1y ago

Get QR code from another bank: RBI to merchants on Paytm Bank deadline

RBI on Friday asked merchants, who are Paytm Payments Bank customers, to obtain new QR codes linked to an account with another bank or wallet. "After March 15...you'll not be able to receive any credit into your bank account or wallet with Paytm Payments Bank," RBI told merchants. Refunds, cashbacks, sweep-in from partner banks or interest will still be permitted.

Setu launches UPI-focused payments platform with Axis Bank

YourStory

YourStory · 11m ago

Setu launches UPI-focused payments platform with Axis Bank

Pine Labs, in partnership with Axis Bank, has launched UPISetu, a UPI-focused payments platform for businesses and developers. The platform aims to simplify integration, merchant on-boarding, transaction tracking, refund/chargeback management, and settlement extraction. It offers various UPI functionalities such as QR code payments, UPI autopay, and third-party validation services through APIs. Merchants can create custom links or QR codes for payments and access features like customised brand offers, instant cashbacks, refunds, and dispute resolution mechanisms. Setu encourages developers to explore UPISetu's sandbox environment for seamless integration and innovation.

Slice launches its UPI first account for all users

Economic Times

Economic Times · 1y ago

Slice launches its UPI first account for all users

Consumer payments and credit startup Slice has launched a UPI first prepaid account for its users. The account offers a UPI handle and a virtual prepaid account, allowing users to add money and spend via UPI or card, and link to other bank accounts. It also includes autoload functionality for seamless transactions and automation of recurring payments. Slice is offering attractive cashbacks to encourage users to start using this feature. The startup has secured the final authorization from RBI for its Prepaid Payment Instrument license.

NPCI pushing new UPI players to offer incentives to expand market share

Economic Times

Economic Times · 1y ago

NPCI pushing new UPI players to offer incentives to expand market share

The National Payments Corporation of India (NPCI) is urging new third-party payment apps on Unified Payments Interface (UPI) to invest and offer incentives to users. This move is aimed at reducing the concentration of transactions on platforms like PhonePe and Google Pay, which currently hold around 85% market share. The NPCI is in constant communication with the leaders of these new UPI players, discussing the offers they are running. However, small incentives may not be enough to significantly shift market share. The deadline for implementing a 30% cap on UPI transactions is the end of this year, and new UPI apps are seeking clarity on its extension.

Government cuts funding for RuPay and BHIM-UPI incentive scheme in Budget 2025

YourStory

YourStory · 5m ago

Government cuts funding for RuPay and BHIM-UPI incentive scheme in Budget 2025

The Indian government has reduced funding for the RuPay and BHIM-UPI incentive scheme from Rs 2,484.97 crore in FY 2023-24 to Rs 437 crore by FY 2025-26, cutting it by 82%. Initially set at Rs 1,441 crore for FY 2024-25, incentives were later revised to Rs 2,000 crore. UPI incentives are crucial due to the eliminated Merchant Discount Rate (MDR), supporting small players in digital payments. With UPI's market share growing to 83%, NPCI extended the compliance deadline for third-party app volume limits to 2026.

Funding value down 74% this week as dismal run continues

Economic Times

Economic Times · 1y ago

Funding value down 74% this week as dismal run continues

In a week marked by a funding drought for Indian technology startups, 16 deals were announced, amounting to $86 million in total. This represents an 11% decrease in volume and a 74% decrease in value compared to the previous week. The majority of the funding went to early-stage deals, accounting for $48.1 million of the total amount. The decline in funding indicates a shift towards a more cautious approach from investors, focusing on fundamental aspects of the companies.

To ease financial squeeze, fintechs mull seeking MDR restoration or higher subsidy

Economic Times

Economic Times · 3m ago

To ease financial squeeze, fintechs mull seeking MDR restoration or higher subsidy

The fintech industry is urging the Indian government to restore merchant discount rates (MDR) or increase subsidy allocations for Unified Payments Interface (UPI) transactions, claiming the current Rs 1,500 crore allocation is insufficient for growth. The government recently removed incentives on RuPay debit cards and large merchant transactions, further straining the sector. Industry leaders suggest introducing a low MDR for merchants with higher turnovers to address funding issues while maintaining zero MDR for smaller merchants.

Paytm sees no impact of lowering of UPI incentives on its path to profitability

Economic Times

Economic Times · 11m ago

Paytm sees no impact of lowering of UPI incentives on its path to profitability

Paytm, the fintech firm behind One 97 Communications, does not expect any impact from the lower incentives allocated by the government to promote small ticket digital transactions. The company's CEO, Vijay Shekhar Sharma, remains committed to achieving profitability this fiscal year despite the reduced incentives. Paytm recently launched a Card NFC Soundbox machine that combines card-based payments with QR code payments, catering to a niche segment. The company reported a widening loss in the previous quarter, but Sharma expressed optimism about achieving profitability in the near future. Paytm also plans to introduce dynamic QR code technology for different payments.

Bhavik Koladiya-led Finix Partners acquires fintech startup Slash

Entrackr

Entrackr · 1y ago

Bhavik Koladiya-led Finix Partners acquires fintech startup Slash

Venture capital firm Finix Partners, led by former BharatPe co-founder Bhavik Koladiya, has acquired fintech startup Slash. The acquisition includes the IP, trademark, and other assets of Slash, while its founders and investors have exited. The Slash App is being revamped and will be relaunched as part of Finix Partners' portfolio. Slash, which operated in the UPI payments and e-commerce domains, had been exploring M&A opportunities and facing a cash crunch. The size of the transaction remains undisclosed.

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