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Our Core Business

To Acquire Consumers and MerchantsThrough Payments And Distribute
Financial Services To Them

Paytm is India's Full Stack Merchant Payment Leader Serving MSMEs and Enterprise Payment Merchants

EXPANDING USE OF AI ACROSS THE ORGANISATION

Expanding the Use of AI Across the Organization

AI is part of our core operating processes and powers every merchant and consumer journey on our platform. AI drives sharper decisions for our teams, greater productivity and intelligence for merchants, and deeper personalisation for consumers. We have developed function specific models and agents by fine-tuning open source models which are being used to achieve higher efficiency and productivity.

FOR ENGINEERING

AI agents accelerate delivery, sharpen cost discipline

FOR MERCHANTS

AI agent-powered sales and services

FOR CONSUMERS

AI-led consumer acquisition and retention

Merchant Onboarding

Fraud Prevention

Customer Delight

Improved Marketing Stack

Enhanced Cross-Sell

Improved Collection Performance

Our Business Model

Payments Business

Paytm operates a full-stack payments business, serving both consumers and merchants across online and offline channels.

Consumer Payments

We are India's Fastest Growing Profitable Consumer Payments Business. Our app is designed to facilitate a wide array of consumer transactions, including the ability to scan and pay using QR codes for payments, recharges, bill payments, and money transfers. To enable these transactions, consumers can utilize instruments, such as cards, net banking, and UPI, across both online and in-store payment scenarios, leveraging QR codes and other devices.

Paytm monetizes these transactions through merchant discount rates (MDR) charged to merchants and convenience fees charged to users, where applicable.

Merchant Payments

For merchants, Paytm provides end-to-end payment acceptance solutions across offline and online channels. Merchants can accept payments through QR codes, Soundbox devices, and Card Machines, supporting all major payment instruments.

Our zero-cost QR solution has enabled more than 5 Cr merchants to join the digital economy. Merchants can further upgrade to Paytm Soundbox devices pioneered by Paytm, which provide real-time voice payment confirmations in 10+ languages. Paytm offers 10+ variants of Soundbox including Card Soundbox, Bluetooth Soundbox and Solar Soundbox assisting merchants to meet their varied use-cases and enhance user engagement. These innovations enhance trust at the point of sale, improve merchant retention, and boost transaction volumes. Paytm monetizes these devices by charging a monthly subscription rental on the device.

For enterprise merchants, Paytm offers an online payment gateway with industry-leading success rates, as well as All-in-One Card Machine (EDC) supporting card and QR acceptance across all major payment instruments. Online and omni-channel businesses benefit from Paytm's payment gateway, which enables seamless payment acceptance across channels, generating MDR and platform fee revenue. Mid-sized and large offline retailers use Card Machines for mobile and card acceptance, generating both MDR and subscription revenue.

Paytm Payment Gateway

Paytm offers a comprehensive platform for online merchants to accept digital payments through its full-stack Payment Aggregator and All-In-One Payment Gateway services. While the gateway serves as a secure technological bridge for routing transaction data, the aggregator capability allows Paytm to legally collect, pool, and settle these digital funds directly into merchants' bank accounts.

By integrating the service, merchants can start accepting online payments and expand the digital reach of their business. It ensures quick integration of the payment solutions, eliminates redirection, and enhances brand visibility with a customized user interface and logo. Paytm has also partnered with major banks...

We Make Money on Payment Processing and Merchant Device Subscriptions

Distribution of Financial Services

We operate as a distribution platform, partnering with financial institutions to offer a range of products, including merchant and consumer loans (including Paytm Postpaid) and equity broking & wealth.

Our partners enter into bilateral agreements with customers, underwrite and own the loan book, and are responsible for KYC and credit bureau reporting as per regulation. Paytm brings the distribution: a large merchant acquiring network, deep payment device penetration, transaction-level insights, and collections discipline giving financial institutions access to a customer base they could not efficiently reach on their own.

With financial services penetration in India still relatively low, we see a significant long-term monetisation opportunity ahead.

Merchant Loan

Paytm, through its 15+ lending partners, offers working capital loans to merchants who are using Paytm devices for accepting digital payments. Device merchants tend to have higher engagement for digital payments resulting in higher payment volumes. These loans are offered to merchants who have high vintage and stable transaction history which offer comfort on the collectability of the loans.

A major USP of this offering is the daily installment repayment system. This structure significantly reduces collection friction while allowing merchants to easily align loan repayments with their daily cash inflows. Furthermore, Paytm holds a distinct advantage in risk management; deep,...

Marketing Services

Our Marketing Services segment is a strategic pillar focused on driving additional monetization by leveraging our large base of payment customers, including both consumers and merchants. This is a high-margin opportunity that enables merchants to conduct more commerce activities and engage consumers. The primary components are advertising and travel ticketing.

Advertising to merchants on our platform, helping deliver high RoI through use of AI for sharper customer cohorting.
Travel ticketing (flight, train, bus) to customers on behalf of merchants. In FY 2026, we launched the AI-led travel app 'Paytm Checkin', with an in-app conversational assistant that understands queries intuitively, letting travellers ask, browse, and book through simple conversation delivering recommendations that improve with every interaction.

Paytm Revenue by Key Segments

COST STRUCTURE

Direct Costs

Direct costs represent expenses directly attributable to Paytm's core business operations, comprising three components:

Payment Processing Charges

Charges paid by Paytm to other financial intermediaries for completing the payment transaction, including card networks, issuing banks, acquiring banks, and NPCI. Incurred on a per-transaction basis, scaling directly with payment volumes.

Promotional Cashback & Incentives

Costs incurred to drive user engagement, merchant activation, and transaction volumes including cashbacks and incentives offered to consumers and merchants as part of growth and retention programmes.

Other Direct Expenses

Variable costs including connectivity (SMS/WhatsApp and SIM costs for devices), financial services distribution (collection cost and Default Loss Guarantee obligations), logistics and device deployment, and ticketing-related expenses.

Indirect Costs

Cost of Building the Platform

Software, cloud and data center costs Cloud and data center facilities, technology licenses and subscription fees, and other related expenses. Non-sales employee costs Employee compensation covering technology, product, business, and all support functions, including ESOP costs. Other indirect expenses Daily operating costs, General and Administrative (SG&A) expenses not directly related to business.

Cost of Expanding the Platform

Marketing costs Expenses for acquiring new consumers, performance marketing, digital brand and trade marketing, social media branding, merchandising, sponsorships, and other marketing expenses, mostly attributable to customer acquisition and retention. Sales employee costs Compensation to sales teams for expanding and servicing the merchant distribution network. Costs increased this past year as we deepen presence in tier-2 and tier-3 cities and increase focus on service.

As we continue to see improvement in efficiencies led by AI, we expect overall indirect expenses to be range-bound for the next few quarters.
In the long term, indirect expenses are expected to grow substantially lower than revenue despite continued investment for growth, leading to significant operating leverage and margin expansion.

EBITDA and Profit

In FY 2026, the Company reported its first full-year of profit and the improvement was driven by:

Market share gains in both merchant and consumer payments

Distribution of Financial services revenue grew to ₹2,594 Cr (up 52% YoY)

Payment processing margin expanded to > 4 bps

AI-led operating leverage reflected in cost optimization

Well-Positioned for Long-Term Sustainable Profit Growth

Large addressable market and AI-led operating leverage; poised for accelerated revenue growth and EBITDA margin expansion

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Expansion of merchant payments business

Accelerating market share gains, driven by strength in the offline business and tailwinds in the online business

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Growth in high-margin merchant loan distribution business

Continues to compound, led by a growing base and AI-led capabilities

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Consumer payments business growing more than 2x of industry growth

Product innovation and AI optimised consumer acquisition leading to market share gains for five consecutive quarters

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Tailwinds in consumer monetisation

Led by distribution of postpaid, personal loans and wealth products

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Continued use of AI and AI-led operating leverage

AI application across our businesses to further drive EBITDA margin expansion.