Clarification on the BNPL/wallet numbers.
We just want to clarify the numbers that Vijay mentioned. It's been three months since launch. We have crossed a lakh customers. Within months of launch, we expect to cross hundred crores of disbursal. Of course, faster than when we launched Postpaid. On wallet, manage expectations. We had talked about wallet profitability being Rs 500 crores in January 2024. We don't think the product is dead going forward. Postpaid as an option is becoming increasingly sticky, relevant, more important today than a year ago.
Color on Paytm Money disclosures.
Paytm Money, just to finish this session. As a legal entity, they do disclose financials, whole bunch is available. Active transacting users on the platform. The sharing becomes single digits type overall. Currently, low single digits. Wait maybe a couple of quarters.
Should we expect the 3Q promotional expense numbers to be the new normal or there's room to further increase?
All right. All right. All right. No, no, no, no. I've said it. I'd rather build a product-led, technology-led instead of spend-led product. Bare minimum told previous quarter, we remember calibrated. Normal trend.
On the marketing services side - we have seen some bottom out happening, improved QoQ slightly. Do you have visibility there?
I think we will continue to see growth in this business, but it is fair to say that the underlying, different things together, exposed to conditions. Very small advertising real gaming went away in Q2. Total revenue much smaller heard. Headwind. Obviously travel hiccups most of the year. Conditions affect bottoming bottomed out this quarter. Will grow.
One of your listed peers talked about watching organized budget. Do you have views on that potential appearing for you?
It's two days away. So let's just wait now.
On payments - presume net margins are holding strong at 4 basis points foreseeable future. Leading implied yield is 60 rupees, excluding PIDF. If you're saying recoup -40 percent, do we assume 60 moves to 65 immediately next quarter? Or efforts efforts leading percent offset?
Yeah. So, Jayant, it's hard to sort of boil it down to only subscription revenue because, earlier, AI-led targets payback period. Payback effort lower transacting more, propensity merchant, cetera. So it targets a whole bunch of different efforts which give us the RoI. So having evolved to that state, we override saying, hey, charge everyone. My places, investment changed behavior okay more, right? Combination of things. Fair blended PIDF.
On payments - so these four basis points, change commentary tone comfortably. Is driven by card business? Peers disclosed product. Would you give RuPay credit card market share?
Sorry, on the first question, you got it exactly right. Which is, yes, there is a UPI. Better card EMI EMI overall. We're extremely well. Space bigger year.
On RuPay credit card market share - peers given 40s. What is yours?
I mean, I'm sorry to say this. Market share is nothing but the revenue contributed monetization.
Follow-up on Jayant's question on payment margin - net GMV calculated revenues divided GMV is down QoQ. Difference between disclosed net and calculated revenues?
Net payment margin as a percentage has not gone up. I don't mind if we take that offline, but my understanding is GMV is up 24%, revenue 22%. Okay, so we'll take that offline if you don't mind.
Quick follow up - assuming rate well, take rate either digital transactions cetera, must profit pool.
Yeah. So the answer is that I would take down the take rate of the industry volume. You've seen categories where it. Prefer least leftover, care processing. For processor, too numbers, easier for me larger volumes. Among rate, absolute value profit customers, customers.
Color on international focus.
So our focus remains, as we have seen before, which is the merchant side business. Haven't expanded yet set foundational work done. Entities areas concrete plans now. Months, couple announcements respect specifically partnerships entered into.
On guidance - currently trending comfortably above our long-term guidance. Revisit now? Seems like a mega trend - penetration picking up.
I think I said that earlier. We'll probably look at that in the next two quarters. But currently solid. Actually. Positive trajectory.
On subscription revenue - you said currently roughly trending at 60 rupees per month rental. Where was a year ago? Coming back to net margin lagging GMV growth. Seems led revenue. What were rentals a year ago?
So if a merchant gets a loan, our loan subsidizes and removes the subscription. So a quarter back, I don't know the number, but at the same point of time, I'm not so less or more concerned with the number, capturing TAM whom we cross-upsell to monetize is the approach personally I carry.
Congrats on the Paytm Check-in and the AI thing - it seems interesting. From a spend perspective, would it come after wealth?
All our businesses are wise enough, self-sustaining enough. In other words, dumping money, throwing things. They self-learning. Traffic. Insight. Built past. Stages instead investment sales. Invest extraordinary opportunity.
On PIDF - in the shareholder letter, you talk about being able to meaningfully offset the impact over a period of time. There's a reference to a 57 percent contribution margin going to the 50s as a result of this impact. Can you reconcile - if there's no impact, how is the CM declining? And how long could it take for the offsets to come?
First and foremost, PIDF core was built as an extension into the hinterland, especially for adding costly POS card devices. The use-case of mobile payment is evident and clear everywhere in the country. We are now ready to tell you that we will offset it from one, earning more, and two, cross-services to these merchants. We are not in device deployment, rental device as a business model, capex as a revenue model. We are strictly into services. Why 50s? We are always conservative.
Follow-up on PIDF offset and CM trajectory.
I'll just answer a couple of other things, Manish. Our expectation is at least -40 percent of impact will be recouped over time through targeted efforts. The work is starting immediately. So these kinds of projects I think we can handle in a very disciplined manner. Why is CM down? We have put it in the worst case situation. There's also a bit of a reporting issue here, which is that if the impact is offset by higher subscription revenue, CM stays fine. So at the EBITDA level, we have said significantly offset.
On the launch of new products, you talk about strong traction on the 'Buy Now Pay Later' product. Can you account for half the disbursals or is it a pull back? And any update on the wallet relaunch likely sometime this year?
So, Manish, yesterday we were discussing, should we start disclosing credit disbursement numbers, crores disbursed per merchant. We added 'Buy Now Pay Later' as a foundational part of the plan. And happy to tell you that we are crossing hundreds of crores of monthly disbursement on this literally in months of launch.
Looking at the business today from a 2026 perspective, is it realistic that you can deliver the margin targets you committed in 2024?
I think the outlook is more or less intact. I think we are as excited about the opportunity today as we were a year ago. Growth without PIDF is robust. There are surprises beyond solidified payments - payments became viable for us, especially side. Our loan does fantastic. We have also mentioned that we did 25% growth on a like-for-like basis, which you can take it for what it is worth. Obviously, we reported 20%. Heading quarter-on-quarter, as you see, ton of operating leverage.
On incremental levers of growth - confidence in merchant lending, soundbox. Your shareholder letter mentions licenses. Should we expect acceleration in onboarding? Is Postpaid today at an inflection point ahead for growth? And along similar lines, equity brokering disclosures as scales up?
Yeah, yeah. So the upside is very clear. Get more, more merchants. And thanks to the focus that I've said, there is a huge amount of upside left in online merchants. In fact, I want to put it on the table that online business has a margin because of platform fees and many EMI card initiatives. Number two is that our device-led offline merchant businesses are phenomenally better than anybody else. So now we have double the confidence of dominating more merchants and more cross-sell of financial services to merchants. And Paytm Money, let me say this. When we launched Paytm Money, it was the top SIP producer in the country. We got defocused. We went through IPO. We went through processes. We will make Money player years.
We did see an increase in promotional expenses this quarter. Is the increase here for retention or market share gain?
Market share gain.
On PIDF and clarifying the impact on margin - near term view, what's the path to offsetting?
Let's just park the contribution margin as a walk from PIDF revenue to EBITDA. So last quarter, this number was some Rs 80 crores. We should be able to offset 30-40% of it, but the remaining impact, 60%, will hit EBITDA in the short term Q4.
Your shareholder letter mentions adopted conservative recognition policy in past quarters. Can you elaborate?
Yeah, so there's been a few different things. We have tightened policy with respect to inactive merchants - if they're inactive after a certain period of time, we would take that pace and stop recognizing revenue. As a result of the policy, the provision for doubtful debts has been tighter. Which, seen, huge PDD. So at an EBITDA level, it is neutral. We think it's much cleaner reporting. It's much more transparent reporting.
Could you shed some light on costs - we've seen almost flat quarters. What's happening in the background? Doesn't that worry you about underinvestment? And on registered merchants growing 12%, whereas devices obviously growing faster - between, how is active shaping up?
The first question on investment is - we are sometimes asked, are you sure you're not overinvesting? I mean, this is because we believe that we have a monetization capability. How can we AI optimize that line item, by the way? And the good thing is that I'm removing the deadwood continuously. That project will continue. There is relocation happening within cost. We are investing in the future.
Add-on on marketing/sales and registered merchant numbers.
I should just maybe add a couple of things. In marketing and sales, our mindset is we invest as much as possible with discipline. We do think in parallel, we're constantly working like Vijay is saying on productivity. We are doing it the right way and we're focusing on productivity. On registered merchants, just to clarify, Pranav, registered disclosed in document is 4.8 crores. Ignore that completely. SEBI obligation we carry. So I'm just telling you that that's not the number that we use for our operations.
Just one follow up. What percent of your GMV would be coming through your entire stated GMV from devices?
I think significantly more than the majority. I mean, the QR merchants are practically nearly negligible. We do not deploy QR merchants. Internal funnel deployment is churn competition's device into our QR or upgrade to Soundbox.
Confirmation on offline GMV mix.
In the offline world, vast, vast majority. Obviously, there's an online GMV as well. There's App GMV well. Offline world, vast, vast majority comes from Soundboxes.
Would it be fair to say like maybe 75, 80% of your offline GMV comes from devices installed?
Nearly all. QR only merchants are negligible. So that's why we started to index only on the merchant whom we charge money.
On the net payment margin trending upwards - you highlighted this in the letter. Can you give color or guidance on the four basis points margin?
Exceeding that consistently. Some of the instrument mix is helping. Last quarter whether EMI driven festive driven. Always part of major driver. We feel pretty confident we will stay above the points for quarters.
And regulation-wise, you didn't have any prohibition on collecting subscription fee right?
No. No, no, no. It was a capex subsidization.
Confidence on moving cohorts to paying subscription.
Some of them do pay, but they do pay lower than our model would suggest, okay, charge lower another similar another area. Exactly.
On lending / financial services - non-DLG mix moving right? caused downward pressure absolute line. Strong growth. MTF disbursements? Which is driving the strong growth?
MTF is not in our credit revenue, by the way. It's in financial services, but we treat it as a separate line.
Color on DLG mix trends.
So the DLG mix has gone down year on year. DLG mix has been broadly stable quarter. Clarify seen trend quarters. Vast majority disbursements loans challenged secondly, efforts collections team, resulting outcomes lenders, gives revenue. Combination of two. Probably trend merchant lending for seven, eight quarters in a row now. So we are quite happy with the way that compounding.
Does the mix change come in the base in the next quarter?
Logically, yes. But I think on merchant lending, those trends will broadly continue. So won't jump thing. At, ball loan cycle. Subject to cycle. Postpaid larger contributor, success of MTF, puts us on an optimistic trajectory for the year.
The consumer UPI GMV that 5.1 trillion on page four, includes P2P, right?
It is what NPCI gives as a number, part of, it is the fraction of that number. It is what NPCI gives the GMV value.
On rentals for soundboxes - merchants who've taken devices two years now since out. Have rents on those gone up? What parameters are you looking at - ability to lend, stickier merchants?
There are two, three factors, without getting into a lot of secret sauce. There are two, factors. One is highly engaged merchant willing to pay for higher-end soundbox. Tap, swipe soundbox, etc. willing more. Second is the dramatically three-year period. So the way our payback period math works is also quite different than it used to be three years ago. So we do factor all of those in. So it'd be a generalization to say, hey, we do increase prices for everyone.
On digital - decent contributor margins for you? Highlight app million purchase daily. Quick word on one. Secondly, your consumer UPI market share has started to go up - where to near term? And on the online side, mostly expanding D2C arena, new ventures arena? Where best opportunity lies?
So I'll start from the three, two, one. So online, our bet is lying that basically onboard while serving merchants. So I'm sure you can very easily comprehend that our offering is more consolidated, not just online for players, offline built day one. We are looking at it, how can we increase the business of this person? So it's a commerce led business plan. I mean, we want to solve for the market share concentration risk by our organic technology plans. That's it. Ambition. Mission keep it. And finally on the gold, it's an easy one. I mean, it works. I believe if a customer has a lock-in on us with this, he will stay longer term. So we don't look at it as a classic product, retain committing something platform.
You've expanded internationally in quite a few geographies. Now wondering, commentaries around this, interested Indian diaspora here, remittance opportunities there?
No, too exotic for us. We simply believe our merchant stack is very replicable, repeatable. We try whenever we try.
On financial services - growth in double digit product. Can you give color on what exactly is driving that? Loan, Postpaid equity loan, what's happening. And secondly, bookkeeping direct expenses 16% quarter - what's driving that?
Yeah. So, the simple thing is that I've credit, adding BNPL foundational to expand it. Then secondly, means interested in distributing loan - everybody in app does that. We are differentiated as a moat. So it may look flat, but internally very important to build a mode of payment led credit instead of just distribution credit, traffic led. Merchant loans consistently growing.
On equity broking share - has that gone up?
A little bit gone up, huge expectations internally from the team.
Color on broking share, monetization and direct expenses.
So market share went up a bit and monetization went up a bit more than that. MTF products on. On second Pranav, direct expenses, combination FLDG, which loan scaling collection costs. Those primary drivers.
If you could highlight largest use-cases that drive momentum metrics on check-in app.
Single metrics on Paytm check-in, I want to tell you Rahul is, we have a funnel that converts at percent. Shocking. Book cheapest ticket between Delhi, Bombay week. Seven days hour day. And people find something so phenomenally good that they're converting 30 percent. One third conversion query. Phenomenal to me minuscule, scale OTA.
What are the bigger use-cases on consumer monetization?
Yeah, absolutely. I think credit, wealth, and commerce equivalent , which are travel deals, cetera.
Any device penetration, or penetration on lending on the merchant side? Do you track potential here? Biggest moat have.
Yeah. So it's currently about 7% on our, so roughly just, just under like a million loans a year, similar million loans outstanding given time. On base roughly 7% that. So the three main drivers of our merchant loan business, in a sense, are devices growing 27 lakhs year, percentage penetration broadly year, take, average ticket size growing, years, compounded 15% that. And the last one has been driven by the fact that the repeat behavior on the platform is very, very strong.
Is there a number you have identified - ideal reach eventually for penetration?
This number could get as high as 20%. Our whitelist base is 40 to 50%, typically. So, and I'm assuming that the whitelist based on everyone will need a loan, even once a year.
Additional color on guidance and MDR.
Yeah, actually it'll materially change when the MDR chatter settles. If there is no chatter year, stays sequence. How much a big app can negotiate money off the bank is banks losing money. It is a bank losing money. Here acquiring. Responsibility side. Layer, leech bank.
Quarter-on-quarter decline in indirect expenses - almost entirely PDD?
The big decline is because of PDD. There are things that we continue to do on making overall efficient. Big decline PDD. Pretty job collecting receivables, including provision receivables past. Provisioning policy pretty tight.
Days of acquisition - the land grab game still on. Now what rates kind of sustain? What kind of trending are you targeting?
I think, as you've noticed, we've always said the customer that matters. We're saying share, share. Saying matters, merchant. Matter consumers based three, worthwhile, monetizable, useful. 250 million we aim for. Percentage be? Discover. Fundamentally today's machinery ability monetize 250 million customers.
While the land grab game still stays on, should we see a meaningful uptake in depreciation ahead? We've benefited bit.
I think because our capex was quite low last year and much higher the year before, probably depreciation policy impact - capex deployment, yes, after increase.