Paytm, which started out as a digital wallet and payment app, has transformed the way Indians transact. It has become synonymous with online transactions and has become a household name in India. Paytm's growth over the last few years has been remarkable. Paytm is on a growth overdrive from a user and revenue perspective.
Paytm credits this growth to three factors: increased merchant subscriptions, growth in bill payments, and rising loan disbursements. Paytm's consumer engagement continues to grow, primarily driven by the customer base they acquired through UPI and other payments and subscription features on their platform.
Paytm has been relentless in expansion and innovation, introducing new features, new payment options for users, or even simplifying daily payments by automating them. Not just this, they have expanded across monthly transacting users, merchant-based subscriptions, merchants, and cross-merchandise value. Paytm has maintained a strong focus on merchant payments, and this has helped them build a scalable model in UPI through which it generates income.
Through the years, UPI has provided Paytm with the opportunity to attract and engage users, enabling them to monetize the platform by upselling loans and payment devices. Payment devices are those small QR code speakers or even the swipe machines that you quite often see at your nearby vegetable vendor or petrol pump. Paytm now dominates the offline payments market with 6.8 million merchants now paying subscriptions for payment devices as of March 2023. Ramping up the sale of these devices has helped Paytm achieve continuous growth in subscription and merchant discount rate revenues from offline merchants.
Paytm has recently seen a rapid growth in their loan distribution business where they give out loans to their customer and merchant base, done in partnership with financial institutions. The loan disbursements have grown by 253% year-over-year to INR 12,554 crores (approximately $1,528 million), and the total number of loans disbursed surged by 82% year-over-year with 11.9 million loans disbursed for the quarter as of March 2023.
Paytm's device business has increased the adoption and scaling up of loan distribution over the last year, and with more devices deployed, the total market for merchant loans has also continuously expanded. Just device merchants account for over 85% of merchant loan dispersals.
Paytm's rapidly growing revenues can also be attributed to its other features like Paytm Postpaid, ticketing sales, credit card revenues, etc. Paytm Postpaid, which allows buy now pay later options to its users, has gained the trust of over 17 million online and offline merchants, a massive growth from 3.5 million in financial year 2022's third quarter. Paytm's commerce revenue grew by 37% year-on-year due to high ticketing sales. The cloud revenues also grew by 15% year-on-year as the advertising revenues started recovering, while credit card revenues continue to rise.
In conclusion, Paytm has become a digital payment powerhouse, transforming the way Indians transact, and is on a growth overdrive. Its expansion, innovation, and focus on merchant payments, along with loan distribution and other features, have contributed to its remarkable growth in revenues. Paytm's continued success in the Indian digital payments landscape will depend on its ability to continue to innovate and expand while maintaining a strong focus on meeting the needs of its users and merchants.