From the local grocery stores to the street vendors dotting the cities, highways, and remote corners of India, we have been instrumental in empowering millions of small and medium businesses to join the nation’s thriving digital economy. Today, Paytm users proudly share heartwarming images and stories of merchants of all ages and sizes who have seamlessly transitioned to digital payments, thanks to Paytm’s innovative payment solutions. We pride ourselves on making access to technology easy and affordable for our merchants by identifying merchant problems that can be solved using technology.
As the driving force behind the digital transformation of countless businesses, we have acquired a large number of merchants from big and small cities across the country. Our merchants derive value by becoming a part of the Paytm ecosystem. We have a registered merchant base of 31.4 million (as of December 2022), increasing by 26% year-on-year. This is one of India’s largest merchant networks.
We are focused on expanding our merchant network to cover a diverse range of businesses from various sectors. The widespread adoption of our payment solutions including All-in-One QR, Soundbox and POS has made Paytm synonymous with mobile payments in India, enabling small and medium merchants to keep up with the rapidly evolving and growing digital payments landscape. Our merchants are spread across more than 450 cities and towns and we plan to expand this to approximately 1,000 towns in the next two to three years.
We continue to solidify our position as the leader in offline payments. As of 31st March 2023, more than 6.8 million merchants are paying subscriptions for our payment devices like Soundbox and PoS. We pioneered Soundbox in India, a cutting-edge technological innovation that has added unparalleled convenience for our merchants. Our ability to foster trust through innovative products such as Soundbox has made us the preferred choice for merchants in India.
Driven by strong growth in the payments devices business, our revenue from Payment Services to Merchants rose to ₹640 crore in Q3 FY2023. We have leveraged our large and growing merchant network to create a strong foothold in the digital lending market in India.
Our subscription-as-a-service model continues to see stronger growth and has been the key driver behind higher payment volumes, and subscription revenues, while increasing the funnel for our high-margin merchant loan distribution business. The total merchant GMV processed through our platform for the three months ended March) was ₹3.62 Lakh Cr ($44 billion), marking a y-o-y growth of 40%. We have sharpened our focus on payment volumes that generate profitability for us, either through net payments margin or from direct upsell potential.
Our devices help small businesses to become eligible for merchant loans, offered on our platform in partnership with marquee lenders. The number of Merchant Loans disbursed grew 253% YoY in Q3 FY 2023, while the value of Merchant Loans grew 285% YoY to ₹1,825 Cr. More than 85% of the value disbursed during the quarter was to merchants with a deployed Paytm payment device. We also see a healthy pickup in repeat loans with 45% of disbursements to merchants who have taken a loan before. The penetration for Merchant Loans is 5.2% of device merchants, highlighting the potential for future growth in this segment.
As we continue to focus on expanding our merchant network, we remain dedicated to helping small businesses grow by giving them solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.