BofA says Paytm continues to increase management in medium to high-monetisation segments corresponding to service provider funds and lending, putting it forward of rivals with a diversified income combine.Additionally Learn: Walmart-backed PhonePe targets as much as $10.5 billion valuation in India IPO
The report notes that whereas shopper funds stay a low monetisation, service provider funds and lending and monetary providers distribution proceed to be medium to excessive monetisation segments for fee platforms.
On this context, Paytm’s income combine stands out, with a considerably decrease dependence on shopper funds and the next contribution from service provider funds and monetary providers distribution.
This diversified combine has enabled stronger margin development and a extra balanced earnings profile for Paytm, positioning it a lot forward in its monetisation journey as in comparison with friends.
For Paytm, funds accounted for under 55 per cent of its whole revenues within the first half of FY26, in contrast with 87 per cent for its closest rival, underscoring a stronger cross-sell engine and a higher capacity to cushion itself in opposition to regulatory headwinds.
In service provider fee monetisation, Paytm was the primary to launch the Soundbox to deepen engagement with small retailers, a mannequin that was later replicated throughout the business. The corporate continues to steer the market when it comes to put in gadget base, and the Soundbox subscription mannequin delivers roughly 60 per cent EBITDA margins, in response to the BofA report. This put in base not solely drives subscription revenues but in addition deepens service provider engagement, making a pure pipeline for credit score distribution.
Curiously, BofA famous that regardless of working at a comparable scale, Paytm compares higher on working expenditure and depreciation and amortisation metrics relative to its friends.
The brokerage additionally highlighted the Noida-based fintech’s rising contribution from lending, insurance coverage and broking offering working leverage past the low-yield UPI ecosystem.
In B2B service provider lending, Paytm enjoys a transparent first-mover benefit and is effectively positioned to maintain its lead, in response to the brokerage.
BofA estimates that round Rs 9 billion (Rs 900 crore) of Paytm’s lending revenues in H1 FY26 have been service provider pushed, underlining the dimensions it has achieved on this higher-margin section.
In distinction, its closest competitor reported round Rs 3 billion (Rs 300 crore) of lending revenues in H1 FY26, underscoring that Paytm’s lending scale is roughly 3 times bigger. The report expects the corporate to take care of its management in service provider lending because the ecosystem expands.
The brokerage additionally factors out that Paytm could possibly be among the many largest beneficiaries of key regulatory developments, together with potential market share caps in UPI and proposals to offer subsidies solely to smaller retailers. Given its robust service provider footprint, such adjustments might strengthen its aggressive positioning.
Past funds and lending, Paytm is sharpening its ambitions in wealth administration. Throughout its third-quarter convention name, the corporate stated it intends to make Paytm Cash one of many prime 5 entities within the area over the subsequent three years.
It has been steadily growing its market share in energetic demat accounts and has moved up the rankings, signalling rising traction within the broking and funding section.
Taken collectively, BofA’s evaluation means that Paytm’s diversified publicity to higher-monetisation verticals, robust service provider franchise and enhancing profitability place it forward of friends as India’s fintech market shifts from scale-driven progress to sustainable earnings enlargement.
