Paytm’s Market Share Plunged by 5% in the Past Year

Paytm is an Indian multinational fintech company that specialises in digital payments, based in Noida, India. Paytm was founded in 2010 by Vijay Shekhar Sharma under One97 Communications Ltd. One97 Communications Limited, which runs Paytm, has seen its market share drop to a new low of 8.4% in April this year from 13.3% the company had in April of 2023. The figures are based on the transaction volume in a month.

Fall in Market Share of Paytm

Paytm is the third largest player in the payments platform, the market share of Paytm has fallen by around 5% in April 2024 from April 2023, This fall is mainly driven by the restrictions of the Reserve Bank of India on the associate company of the fintech company, Paytm Payments Bank Limited(PPBL), Unified payments interface service of Paytm was powered by Paytm Payments Banks Ltd. and since this action by the Reserve Bank of India, the company had to make the transition to a third party app model. This is a key reason for the fall in the market share of Paytm.

The company is facing this decline in market share as due to the challenges in acquiring new customers. To address this challenge, it’s focusing on speeding up the migration of the existing Unified Payments Interface customers from the @paytm handle to the bank UPI handles. Paytm has enlisted Axis Bank, Yes Bank, SBI, and HDFC Bank as its partners in the Third Party Application Provider service, where Payment Service Provider banks will facilitate connections between UPI apps and the banking network. Previously, Paytm Payments Bank Limited (PPBL) was serving this role for Paytm.

Share Prices Falling Continuously

The shares of One97 Communications Limited, which runs Paytm have locked in a lower circuit of 5% every day for the past 3 sessions, The stock has fallen by more than 64% in the past 6 months, The restrictions imposed on RBI are one of the key reasons for this fall. This will also impact the financial performance of the company. 

The company is facing various problems, recently the company has announced the resignation of Bhavesh Gupta, The COO and president of the company. This resignation would be effective after the close of business hours on May 31, 2024.

Conclusion: The downtrend for Paytm company is not looking to stop, the company is facing various problems at the same time, and recent top levels in the company before the release of Q4 earnings have worried the streets about the performance of the company in the Q4 FY 2023-24 quarter because of RBI restrictions, The stock is currently locked in its lower circuit price of Rs.317.15 a piece.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.