We have been registering strong growth for multiple quarters, supported by our strong business model and sustained revenue growth.
In a recent analyst meet held in Mumbai, our management provided key insights into the company’s business model, and highlighted the large growth opportunity for the payments business in India with a potential of 100 million merchants and more than 500 million payment customers.
Our growth momentum remains strong over the past few quarters, supported by sharp improvement in net payments margin, rapid scale up of the loan distribution and subscription based devices business, and operational profitability in the commerce business.
Going forward, our management has outlined five key growth drivers behind the strong business model and revenue growth.
Growing UPI Adoption: We believe that mobile payments is still in its infancy in India with 25 crore signed up customers, while there are only a total ~1 crore devices in the market. This provides us with immense potential for future customer acquisition through UPI, which will subsequently provide a boost to its high-margin services such as loan distribution and devices.
Rising Demand for Merchant-based Services: With 5.8 million devices deployed among merchants across India, we believe that overall subscriptions for payments and other services will become a large market in the country. We are already a leader in the offline payments segment, backed by a large network of merchants and strong adoption of our subscription as a service model. Moreover, we plan to keep on helping merchants in expanding their businesses by offering coupons, deals, marketing and loyalty which will in turn create more revenue and profit for our commerce business.
India’s Growing Potential as a Digital Economy: India is already the leading market for digital payments in the world but it still has immense potential for growth, given its massive population and rapid increase in smartphone users. We believe that India could have the potential of 10 crore merchant entities and more than 50 crore payment customers in the near term, and this would be a key growth driver for us, considering the role we have played in pioneering the mobile and QR payment revolution in the country.
Growing Partnership With Banks: Bank partnerships for selling products is another area wherein we see a great opportunity. FASTag and Co-branded credit cards are already a success, and EMI aggregation on PG, remittance among others could be next key drivers of growth for us.
Financial Services Gaining Momentum: Our financial services revenue jumped significantly in the second quarter of FY23, at 18% of total revenue generated during the quarter. We remain confident that financial services will be an integral growth driver for us, supported by rapidly rising demand for our loan distribution services and stock brokerage offerings.
While these are five key growth drivers that we have outlined, it may be noted that we have seen sustained growth across all our businesses in the past quarter and remain focused on expanding our platform further to create long-term value and achieve operating profitability by September 2023.