Last year’s regulatory troubles continue to haunt Indian FinTech Paytm.The company’s third-quarter earnings showed a 36% drop in revenue to 18.3 billion rupees (about $212 million), below the 19 billion rupees analysts had projected, Bloomberg reported Monday (Jan. 20). The company reported a net loss of 2.08 billion rupees, while analysts expected 3.32 billion rupees in losses.Early in 2024, India’s banking regulator essentially closed down Paytm Payments Bank — the company’s banking arm — following years of warnings about unregulated data flows between that business and its parent.With the banking business shut down, the company was forced to find new partnerships with other Indian lenders. It also sold off its movie and events ticketing business to Zomato to help reduce expenses and is waiting for permission from India’s central bank to become a payments aggregator, per the report.Paytm’s average monthly transacting users dropped to 70 million during the quarter from 71 million in the prior quarter, according to the report. Paytm said it issued 38.3 billion rupees in merchant loans during the third quarter, up 16% from the previous quarter.Paytm is part of a busy payments space in India, competing with the likes of Google Pay and the Walmart-linked PhonePe.Meanwhile, the India edition of PYMNTS Intelligence’s “The Embedded Lending Opportunity” report examined the rise of embedded lending among consumers and microbusinesses and small businesses (MSBs) in that country, the most populous in the world.The research found that 15% of consumers and 37% of MSBs in India use this type of lending. Over two-thirds of each segment reported that they are highly likely to switch to providers that offer embedded lending.“However, users widely experience friction that detracts from their experience,” PYMNTS wrote

Paytm won approval from India’s finance ministry to invest in its payment services operation.The company announced the approval Wednesday (Aug. 28) in a disclosure posted to its website. Paytm has faced scrutiny this year after being ordered to close its payments bank in January.Paytm said it will now apply with the finance ministry to get back its payment services license.“We remain committed to a compliance-first approach and upholding the highest regulatory standards,” the company said in its letter. “As a homegrown Indian company, Paytm is focused on contributing to and advancing the Indian financial ecosystem.”Paytm has been struggling since the Reserve Bank of India (RBI) — the country’s banking regulator and central bank — suspended business at Paytm Payments Bank, which had processed much of Paytm’s payments.The RBI made the move after an audit uncovered “persistent noncompliances and continued material supervisory concerns,” although the regulator had been warning for years about the questionable relationship between Paytm and its banking arm.Last month, Paytm reported that its operating revenue slipped again in the quarter ending in June as it continued to wrestle with regulatory issues.Operating revenue fell from 19.8 billion rupees (about $236 million) in the last quarter to 15 billion rupees (about $179 million). That was down from 23.4 billion rupees (about $279 million) in the same period a year ago.“The full financial impact of the recent disruptions was seen during this quarter,” Paytm said in an article on its website. “With green shoots visible across — growth in merchant payment operating metrics, gross merchandise value (GMV), accelerated merchant reactivation and an expanding merchant base, coupled with our continued focus on cost optimization — we remain optimistic about our revenue and profitability improvement.”This year saw Paytm lose ground on India’s Unified Payments Interface (UPI) to the likes of Google Pay and the Walmart-backed PhonePe.These companies are competing for consumer attention in a country that has been on a digital payments journey for the past 15 years, PYMNTS wrote in late 2023

Zomato is acquiring Paytm's entertainment and ticketing business for ₹2,048 crore ($244 million) to enhance its "going-out" sector presence. Paytm will transfer its movie ticketing business to OTPL and its sports/events ticketing business to WEPL, both wholly-owned subsidiaries. Zomato will buy OCL's entire stake in OTPL and WEPL and infuse funds to settle the slump sale. The acquisition cost is ₹1,264.6 crore for OTPL and ₹783.8 crore for WEPL, expected to complete within 90 days.