New Delhi: The central bank’s recent decision to create a discussion paper on digital payment fees has left a ruckus in the markets, especially over its potential impact on banks and digital payments players like Paytm. However, analysts said on Monday that recently listed Paytm is unlikely to be affected by these charges.
“The digital payments ecosystem has grown exponentially over the past five years and has propelled India to the top of the global rankings. The sector has witnessed high competition with the influx of new players and there may be deviations from best practices in search of margin and market share. The upcoming regulations, therefore, will keep the interest of consumers at the epicenter and ensure a structured and responsible growth of the sector,” said Rahul Sharma, Equity 99 Advisors.
Additionally, many of Paytm’s businesses ranging from banking, wealth management to insurance are already businesses that need to be regulatory compliant. The company’s focus on transparency defines its products, and also helps build trust with regulators and other stakeholders.
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This responsibility is even greater as the company helps people to manage, spend and save their hard earned money.
RBI’s move to create a discussion paper on digital payment charges is to ensure that they are affordable for the users, while also being a good economic option for the providers. Such initiatives can be a massive enabler and accelerator for India’s continued transformation into a cashless economy.
“For Paytm, being the only listed player that also has a banking license leads to additional regulations, which are not experienced by its unlisted counterparts. Stringent regulations in this area would provide level playing field to some extent and would result in consolidation of the sector; Which, in turn, could be beneficial for Paytm”, said Avinash Gorakshakar, head research, Profitmart Securities.
Paytm, which got listed in November 2021, is expanding its business with a focus on financial services. With a push from non-UPI GMV (Gross Trading Value), the company’s revenue has been growing on a quarter-on-quarter basis.