As we continue to grow and strengthen our Paytm ecosystem through the acquisition of consumers and merchants and providing them with greater access to technology and financial services, the Paytm Super App continues to see growing consumer engagement.
The increasing adoption of payments use cases on our platform has resulted in our Monthly Transacting Users (MTU) growing 32% year-on-year to reach a new milestone of 85 million for the quarter ended December 2022.
Consumers come to our platform for a variety of payment use cases as well as the comprehensiveness of available payment instruments. The increased adoption of the Paytm Super App and Paytm Payment Instruments by users makes it more appealing for merchants to accept these methods of payment. As more merchants accept these instruments, the consumers see that Paytm Payment Instruments have wide acceptance, making it more attractive for consumers to use Paytm. Our ecosystem has multiple, self-reinforcing flywheels, which drive consumer and merchant engagement and growth in our ecosystem.
We believe that payment services, including UPI, provide us with an attractive way of acquiring, retaining, and monetizing users and merchants.
Consumers use a wide selection of instruments (both third-party like cards and net banking and Paytm Payment Instruments like Paytm UPI, Wallet and Paytm Postpaid) to make online payments on the Paytm Super App. Certain payment categories like money transfers, in-store payments and bill payments are highly relevant, high-frequency use cases that are efficient and pre-dominant means of consumer acquisition for us and carry low CAC.
UPI merchant payments (which are free for the merchant) have become revenue-generating due to government encouragement for digital payments in the form of incentives for UPI P2M transactions. Due to the tailwinds for UPI merchant payments, we are also able to make attractive subscription revenues for payment devices, and MDR for non-UPI payments.
We have been able to monetize our platform by upselling financial services to our customers and merchants, and also upselling payment devices to our merchants which also helps in reconciliation for them. Merchants also use our marketing offerings such as tickets, deals and gift vouchers to leverage our consumer traffic to grow their business.
We leverage our large distribution, and insights from our payments and commerce services, to upsell high-margin and low-CAC financial services to our consumers and merchants. For consumers and merchants, we offer various lending products, with our financial institution partners, such as Paytm Postpaid (BNPL), Personal Loans and Merchant Loans. The distribution of co-branded credit cards enables us to generate upfront revenue on card activation and receive a portion of the interchange fee for the lifetime of the card.
During the Q2 earnings call, our Chief Financial Officer, Madhur Deora, highlighted the company’s focus on three key areas. The first is platform expansion, in order to increase monetization capacity in the future. The second is monetization engines working, resulting in revenue growth across all business segments. And finally, the company is focused on improving profitability, by optimizing unit economics and generating operating leverage, as we continue to invest in our business, ultimately leading to an improvement in EBITDA before ESOP costs.
We are focused on further expanding our payments network by acquiring quality customers and merchants with high activity rate and transaction frequency. The Paytm Super App continues to see growing consumer engagement. Platform expansion creates higher monetization capacity and our revenue growth is led by platform expansion and increased monetization across businesses. We believe that there is continued scope for expansion given the under-penetration of the various products and services we offer. The growing engagement on our platform gives us monetization opportunities across payment, lending and commerce.
