Paytm Bank's exit from UPI unlikely to be disruptive
UPI platform may not have as disruptive an impact on the cashless transaction ecosystem as is being currently feared as most users have multiple backend accounts that are out of the scope of the central bank's curbs.
Furthermore, only about a sixth of the 90 million Paytm UPI users use the app as the sole application for transactions, people familiar with the developments said.
Similarly, in the merchant's category, about 70% of the merchants availing services of Paytm have their accounts outside of Paytm Payments Bank. That means they are not totally dependent on the payments bank for their business.
«Although Paytm is a big player, the actual or effective presence of Paytm Payments Bank in the various areas of its functioning are not as high as projected,» said a person familiar with the usage data.
In a report on Tuesday, Macquarie Capital Securities expects a sharp reduction in Paytm revenues across various segments, anticipating an exodus of customers. It had pegged the overall customers at 330 million. They include 110 million of monthly transacting users and a merchant subscription network of about 10 million.
Macquarie had estimated that One97 Communications, the Paytm parent, will lose 60% to 65% of revenues over FY25 and FY26 in both its payments and distribution businesses after the RBI asked the payments bank to stop all basic payment services through various platforms and technology railroads — UPI, IMPS, Aadhaar-enabled payments and bill payment transactions — with effect from February 29.
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