Everything everywhere all at once. It’s not just Hollywood sci-fi — in India’s bustling fintech ecosystem, that’s what super apps want to be. And, that’s the pitch that Vijay Shekhar Sharma used before Paytm’s public listing and towards the latter years of its life as a private company.

The idea of super apps — from payments to ecommerce to investments to insurance and more — has travelled from China to India, but so far we have not really seen this approach unlock the revenue value that had been promised.

Relying on UPI payments for customer acquisition, super apps today are still bleeding money on verticals and if Paytm epitomised the trend at one time, now, with its payment business disrupted in 2024, the fintech giant is shedding parts of its super app empire.

The deal with Zomato for Paytm Insider was a clear sign, which was followed by the stake sale in PayPay in Japan. Sources claim Paytm First Games is likely to be offloaded next. And with CEO Sharma proclaiming in 2024 that payments will be the biggest focus area going forward, could other verticals also step out of Paytm’s umbrella?

Catching Up With Paytm’s Super App Dream

“Vijay [CEO Sharma] always wanted to play a bigger game – more like India’s answer to WeChat or Alibaba with huge data of consumers at his disposal. The hypothesis could have come from Chinese investors in Paytm who were the biggest internet giants,” a veteran fintech investor, who had invested in Paytm earlier, said.

UPI transactions, which constituted the majority share of digital payments, became a non-monetisable entity after the introduction of the Zero MDR regime in 2020.

It eliminated the merchant discount rate (MDR) charged on transactions using UPI, which is today the largest digital payment mode in India. For Paytm and other UPI apps, the zero MDR is a major revenue leech, especially because of the incessant customer acquisition spending.

The biggest blow to the startup came early last year, when the Reserve Bank of India cracked the regulatory whip on Paytm Payments Bank, setting Paytm back by more than a year in terms of revenue.

This froze the company’s wallet business and disrupted its lending business. Merchant payments also suffered as Paytm had to scramble for new banking partners, and there was an RBI-mandated review by banks and NBFCs on how digital loans were being distributed. This impacted the overall revenue of Paytm in FY25 and towards the end of FY24.

We will dive into the financial comparison with PhonePe, Paytm’s closest payments super app competitor later in this piece, but first a look at how much of the Paytm super app promise is even intact compared to what it was just two years ago.

Paytm First Games: Next In Line?

After the sale of Paytm Insider to Zomato last year and divesting from PayPay, Sharma claimed that the company is on track to report profitability in the next two quarters. When we tested these claims last week, experts and analysts ruled out the possibility of Paytm racing to profitability unless the company succeeds in raising revenue significantly in the next two quarters.

As the fintech startup banks on UPI incentives, it will........

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