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Jayant Mundhra
•
Dexter Capital Advisors • 1y
Paytm shareholders are ignoring this? 📛📛 The fintech giant was the only UPI app to be making money on UPI. And now that’s no more possible. Here's all you should know! .. The thing is, NPCI (via Govt grants) compensates the banks to up keep the UPI infra at the backend. And this runs into thousands of crores. However, no bank shares this money received from the NPCI with front-end consumer apps like PhonePe or Google Pay. However, Paytm’s case was different. .. Given Paytm Payments Bank was an associate company, it had worked out a preferred arrangement. Herein, Paytm Payments Bank powered the UPI facility which people used on the Paytm app. And the payments bank shared a fixed proportion of the money received from NPCI. > In FY22, it received Rs 90cr. > In FY23, Rs 182cr. .. This was an oddity, because no other competitor had such a relationship with their partner banks like YES BANK, Axis Bank or HDFC Bank etc. But, now that’s no longer true, because Paytm’s partner banks have changed today. The UPI load on its app will now be powered by those three aforementioned banks and State Bank of India. So, no more favourable money sharing. Thus, a negative! 📛📛 .. UPI shall remain a user acquisition and engagement tool for Paytm. It shall also help generate copious amounts of data, which is then cross-leveraged for other products. But, all of this will now come at a cost, unlike before. That’s something the shareholders and enthusiasts should know. What do you think?
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