NEW DELHI: Faced with stiff competition from fintech giants such as Paytm and Google Pay, Walmart-owned digital payment start-up PhonePe has registered more than double its losses in 2018-19 compared to a year ago on account of higher expenses.As per a filing with the Registrar of Companies, PhonePe’s total income grew by 401 per cent to `245.8 crore from `49 crore in FY18 in tandem with its net loss, which increased by 141 per cent from `791 crore in FY18 to `1904.7 crore in FY19. Its net loss stood at 7.77 pcer cent of its total income.
The losses are rising gradually every year on account of its net losses, which was `129 crore in FY17. Interestingly, PhonePe spent `2,153.2 crore in FY19 in total expenses, up from `840.1 crore (to earn a total income of `245.8 crore). It spent nearly `1,297 crore in ads and promotions, up from `602 crore last year. Operating expenses shot up to `2,129 crore from `831 crore, while depreciation and amortisation amount rose from `2.8 crore to `23.7 crore.
In contrast, rival Google Pay posted a net profit of `5.1 crore in FY19 with revenue of `1,119 crore, an increase of 2.5 times compared to the `438.3 crore in FY18. Parent One97 Communications said Paytm saw losses increase to `4,217 crore for FY19 on a consolidated basis. Total revenue was `3,579 crore on the back of `7,730 crore in expenses (which almost doubled from `4,864 crore in FY18) for this fiscal.
With 150 million users, PhonePe is said to be in talks to raise up to a billion dollars in fresh funding to shore up offline presence for capturing a large share of offline payments market. The company said its app drove 380 million transactions in August, with 90 million offline transactions. It claimed that it was accepted as a payment option across 6.5 million stores in 210 cities. Meanwhile, Alibaba, SoftBank, Walmart, Google, Amazon, and Facebook are keeping a watch on Indian digital payments opportunity, which is untapped since more than half the population still doesn’t own smartphones.
Even Amazon Pay feels the pinch
Like PhonePe, Amazon Pay India — which is rival Amazon’s digital payments unit — has also seen its losses surge. Amazon Pay India saw its loss widen to C1,160.8 crore in FY19 from C334.2 crore in FY18.