Paytm Confident Revenue Growth Will Offset End of RBI Incentive Scheme

In a clarification filed with stock exchanges, One 97 Communications Ltd said it currently recognises incentive income under the PIDF scheme, linked to qualifying expenditure on payment acceptance devices such as Soundboxes and EDC machines.

Addressing the scenario in which the scheme is not extended beyond its validity, the company said it expects to offset the impact "through a combination of stronger revenue growth and more focused, targeted sales execution."

The clarification comes amid Paytm's broader operational turnaround, with the company having demonstrated improving operating leverage and quarter-on-quarter profitability over recent periods. Market participants note that incentives such as PIDF were designed as time-bound measures to catalyse adoption, while scaled platforms are expected to sustain growth independently over time.

The PIDF scheme, which was valid until December 31, 2025, was introduced to accelerate the deployment of digital payments infrastructure across Tier-3 to Tier-6 centres and underserved regions, including the Northeastern states and the Union Territories of Jammu, Kashmir and Ladakh. For the six months ended September 30, 2025, Paytm recognised ₹128 crore in incentive revenues under the programme.

Brokerage Investec Equities, in a note on Friday, said Paytm's strong position in offline payments, with over 50% share in Soundboxes and around 10% share in physical POS, along with a 15-20% market share in online payment gateways, positions it to benefit disproportionately from increased penetration of credit-linked payments, supporting margin expansion.

"Over FY25-28 end, we expect payment GMV to grow at 25% CAGR, and rising credit penetration (credit cards, RuPay CC on UPI, credit line on UPI) should lift net payment margins to 4.6 basis points (bps) by FY28 end (vs 3.8bps in FY25), driving a 32% CAGR in net payment processing revenue over FY25-28 end. Despite a major regulatory setback in FY25, when the RBI curtailed its payments bank operations, Paytm's swift and proactive mitigation efforts have been noteworthy," said Investec about Paytm.

Investec also highlighted Paytm's deep technology stack and embedded merchant relationships as key drivers of long-term pricing power and operating leverage, noting that most merchant acquisition costs have already been incurred.

With the disclosure, Paytm sought to reassure investors that the conclusion of the PIDF scheme does not change its long-term growth trajectory or profitability outlook.

- ANI