Fintech Giant BharatPe's Business Surges 77% As Paytm Payments Bank Falters On RBI's Restrictions

In India's fintech sector, BharatPe has become a frontrunner, capitalizing on the recent regulatory interventions on Paytm Payments Bank that shook the industry. Following the Reserve Bank of India's (RBI) restrictions on Paytm's Payments Bank arm, BharatPe experienced a meteoric rise in its operations, signalling a significant shift in the market dynamics.

According to reports from the Hindu Businessline, BharatPe witnessed a staggering 77% surge in merchant onboarding in February 2024 compared to the previous month. The platform's website traffic for onboarding inquiries soared by over 47%, underscoring the heightened interest among merchants seeking alternative payment solutions.

The surge in onboarding was particularly pronounced across different tiers of cities, with Tier-I cities leading the charge with a 76% increase, followed closely by Tier-II cities with a growth rate of 63%. Tier-III cities and beyond witnessed a remarkable surge of over 83%, propelling BharatPe's total merchant base to surpass 13 million by the end of February.

One of the most significant shifts observed in the wake of Paytm's regulatory woes was the migration of Kirana stores to alternative platforms. Approximately 42% of Kirana stores reportedly shifted to platforms like Mobikwik, BharatPe, PhonePe, and GooglePay, citing the need for uninterrupted UPI payments amidst the uncertainty surrounding Paytm. Previously holding a dominant 69% market share among Kirana stores, Paytm's setback opened doors for its competitors.

During the initial half of February, BharatPe witnessed an astounding 100% increase in merchant sign-ups compared to the previous month. Metro cities witnessed a surge of 104%, while Tier-2 and Tier-3 cities saw an uptick of 95%, indicating a widespread adoption of BharatPe's offerings across diverse geographies.

The surge in merchant acquisitions can be attributed to a combination of factors, including additional features and lucrative offers rolled out by BharatPe. Free QR code setup, flat earnings of up to Rs 300, and instant settlements acted as significant incentives for merchants to join the platform, further fueling its growth trajectory.

Moreover, BharatPe's financial performance showcased signs of resilience and improvement amidst the shifting industry dynamics. The company's loss narrowed to Rs 886 crore in FY23 from Rs 5,594 crore in FY22, signalling a positive trend in its financial health. Additionally, the EBITDA loss decreased by Rs 158 crore in FY23, reflecting improved operational efficiencies.

A standout performer within BharatPe's ecosystem was its merchant lending business, which witnessed a remarkable growth of 129%, reaching Rs 5,339 crore. The total loan disbursements amounted to approximately Rs 12,400 crore to date, underscoring the fintech giant's commitment to empowering small businesses across the country.

Since its inception, BharatPe has been successful in attracting significant investments, totalling over $583 million in equity from a diverse set of investors. Notable names among its investors include Peak XV Partners, Ribbit Capital, Insight Partners, Amplo, and Tiger Global, among others.