Paytm Shifts Focus to Core Business, Aims for Profitability Soon: CEO Vijay Shekhar Sharma

Paytm, one of India’s leading fintech companies, has announced a renewed focus on its core payments business as part of its efforts to achieve profitability soon. Vijay Shekhar Sharma, Paytm's founder and CEO, made the announcement during the company’s annual general meeting, stating that the lessons learned over the past six months have been instrumental in reshaping the company’s approach to business processes and compliance.

Sharma emphasized the company’s commitment to ensuring compliance with all regulatory standards. "The past six months provided us with an opportunity to deeply examine our business operations and compliance measures. We have since adopted a compliance-first approach, ensuring that every aspect of our business fully adheres to regulations in both letter and spirit," said Sharma.

The announcement comes as Paytm continues to address the impact of restrictions placed on its payments bank subsidiary by the Reserve Bank of India (RBI). In February, the RBI directed Paytm Payments Bank to stop accepting new deposits, including deposits in its popular digital wallets. Despite this setback, Sharma assured stakeholders that the company is working to apply for a payments aggregator license from the RBI soon.

"With our strong focus on the core payments business, we are confident that we will achieve PAT (profit after tax) profitability in the near future," Sharma stated. Paytm's strategic initiatives will continue to revolve around payments, while also exploring opportunities to cross-sell financial services such as loans, insurance, and mutual funds, broadening its customer base and promoting financial inclusion.

Paytm’s growth plans are further supported by the company’s recent approval to receive foreign direct investment from the Indian government. The fintech giant has also been actively incorporating artificial intelligence (AI) into its products, business operations, and decision-making processes. According to Sharma, "Some of these AI-driven technologies have the potential to evolve into standalone businesses. However, our current focus remains firmly on the core payments business and expanding our financial services offerings."

With a customer base of 40 million merchants, Paytm aims to expand this number to 100 million. As part of this expansion, the company is leveraging advanced technology to streamline its services and enhance customer experiences. Sharma highlighted the company’s goal of using AI and machine learning to offer tailored financial services, allowing it to further tap into the vast Indian market. These services, including personal loans, insurance products, and mutual funds, align with Paytm’s mission of promoting financial inclusion across the country.

Despite its strategic focus and technological advancements, Paytm reported a net loss of Rs 839 crore in the first quarter of FY25. This loss was largely attributed to the ongoing restrictions on the payments bank, as well as a contraction in revenue from its payments and financial services segments. The company’s leadership remains optimistic, however, as they believe that the lessons learned over the past year will pave the way for stronger growth and profitability in the future.

Sharma’s reassurances during the AGM suggest that Paytm is on track to not only navigate the regulatory hurdles posed by the RBI but also to emerge as a more efficient and focused organization. The fintech company’s reliance on advanced technologies and a clear commitment to its core business indicates that it is prepared to overcome current challenges and build a more profitable future.

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In conclusion, Paytm’s emphasis on compliance, its strategic shift toward core business, and the use of innovative technologies position the company well for future success. As the fintech market continues to grow, Paytm’s ability to evolve and maintain focus on its primary business could be the key to its profitability and sustained growth.

[Disclaimer: The content provided here is based on available information and statements made by Paytm’s CEO during the AGM. This article is for informational purposes only and does not reflect official positions or statements from Paytm.]