It is due to RBI regulation on Feb 23 that restricts onboarding of new customers until migration of existing customers to new handles is complete and you have to take customer consent before giving them new upi handle. Basically since the psp bank is going to be changed from PPBL to other banks RBI is looking at it as if it is a case of fresh UPI registration. Don’t know how long this saga will continue before allowing them to onboard new customers. What’s interesting is that existing customers started getting messages since yesterday like this “ Paytm is now powered by 4 banks!
We are creating new UPI ID with these banks to ensure seamless payments. If you wish to opt out, tap https://m.paytm.me/UPInew“. Whether the regulator had permitted them to do this or not is unknown. If it is a no, they will again be in the crosshairs. Uff. But killing it you will end up having a foreign controlled duopoly in the countries payment system. Interesting times in payment space!!!
What a wealth destroyer PAYTM has been. From a listed price of 1800 to 450 now, a 75% evaporation. The dangers of buying a stock based on narratives.
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Having said that, I think the worst seems to be over for now in terms of firefighthing: monthly transacting users have stabilised in the range of 7-8 crores and merchant subscription at 1 crore.
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How the company is going to generate value going forward is a metric to be seen but is it not the case with all the new age companies ; Nykaa at 50k crore valuation; Zomato at 1.93L crore valuation with thr estimation of profitable cash flow assumptions stretching in to 15-20 years to make sense of these valuations.
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The value of a payment business is not in transactional revenue but in the data and the insights it generates. Imagine an insurance company cross checking your declaration that you’re not a smoker by requesting the data from payment companies for a fee(a daily debit of Rs.18/-). Paytm still holds 8-9% market share in UPI transactions and with the regulator wanting to cap the market share of each TPAP at 30%, it can only be beneficial to Paytm if it manages the risks outlined in pt.1 well enough.
Disc: Not invested. Interested and studying further.
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