PIDF scheme impact to be offset by revenue growth, targeted sales: Paytm

The PIDF incentive was aimed at accelerating digital payments infrastructure across Tier-3 to Tier-6 centres, as well as underserved regions including the Northeastern states and Union Territories

Paytm on Friday issued a clarification to stock exchanges to address recent market speculation, stating that any potential impact from the conclusion of the RBI's Payment Infrastructure Development Fund (PIDF) scheme is expected to be significantly offset over time through higher revenues and more targeted sales efforts.

In a filing with the National Stock Exchange (NSE) and BSE, One 97 Communications Ltd said it has revenues recognised as incentives from the programme, linked to qualifying expenditure incurred towards the deployment of payment acceptance devices such as Soundboxes and EDC machines.

Addressing the scenario directly where the scheme is not extended, the company said it expects to "meaningfully offset the impact over time through a combination of stronger revenue growth and more focused, targeted sales execution".

 

The PIDF incentive was aimed at accelerating digital payments infrastructure across Tier-3 to Tier-6 centres, as well as underserved regions including the Northeastern states and the Union Territories of Jammu, Kashmir and Ladakh.

The PIDF scheme was valid until December 31, 2025. For the six months ended September 30, 2025, Paytm recognised Rs 128 crore in incentive revenues under the scheme.

The disclosure comes against the backdrop of Paytm's broader turnaround and resilience story.

Over the past few years, the company has repeatedly demonstrated its ability to adapt, recalibrate costs, and drive operating leverage across its core businesses, while turning profitable on a quarter-on-quarter (QoQ) basis. This has been accompanied by steady improvement in financial performance on a quarterly basis, reinforcing confidence in the sustainability of its business model.

Market participants note that incentives such as PIDF were designed as time-bound policy measures to accelerate digital payments adoption, while Paytm's core payments, merchant acquiring, and distribution businesses continue to scale independently.

The company's focus on revenue diversification and disciplined execution has been central to its ability to absorb policy changes and emerge stronger.

Citing that, brokerage Investec Equities on Friday said that Paytm's strong presence in offline payments (industry-leading 50 per cent+ Soundbox share, 10 per cent physical POS share) and in online payments (15-20 per cent payment gateway market share) will disproportionately benefit, providing increased penetration of credit-linked payments, which expands its net payment margins.

The brokerage firm further noted that Paytm's deep tech capabilities and embedded merchant relationships support its long-term pricing power and impose high switching costs. "With most of its merchant acquisition already in place and a digital-first model, Paytm enjoys substantial operating leverage," said Investec.

With the latest clarification, Paytm has sought to reassure investors that the conclusion of the PIDF scheme does not alter the company's long-term trajectory, underlining its confidence in sustained growth, profitability, and execution strength.