PayTM could turn profitable in 2021: CEO
Speaking at a panel on how technology can help tackle financial exclusion, Vijay Shekhar Sharma said the crisis had forced more merchants to use PayTM's platforms as businesses were forced to accept digital payments
Indian fintech giant PayTM may turn profitable this year as the pandemic fuels a surge in the use of its payment platforms, the company's chief executive and founder told the Reuters Next conference.
Speaking at a panel on how technology can help tackle financial exclusion, Vijay Shekhar Sharma said the crisis had forced more merchants to use PayTM's platforms as businesses were forced to accept digital payments.
"We could very well break even this year, we will start making money," he said.
"I was surprised by the opportunity of monetization in 2020 during the pandemic, not just by our wealth accounts but also by lending."
PayTM, which began as a service for people to top up their mobile phones, offers a digital payment platform for merchants, money transfers, and bill payments across India. Its lending businesses include credit cards, personal loans, and merchant cash loans in partnership with other lenders.
Pressed on whether the company, which is backed by Chinese fintech giant Ant Financial and Japan's Softbank, would soon look to list, Sharma said it would look at that when profitable but had no plans in the "short term".
PayTM was valued at about $16 billion during a private fundraising round in 2019.
Cristina Junqueira, co-founder of Brazilian fintech Nubank, who was also on the panel, said the coronavirus crisis had led millions of people in Latin America's biggest economy to turn to digital banking for the first time.
"A lot of the people that were most deeply impacted financially by the pandemic were also required to find ways to receive the government stimulus ... they had to choose digital means," she said.
Nubank is now looking to use a surge in deposits on its platform to start scaling up its lending business.
"As recovery approaches, there's a lot of need to rebuild, and a lot of companies that went bust, and a lot of individuals in need of credit. We're really hopeful that 2021 is a year we're going to be able to maybe increase our exposure on the credit side tenfold," Junqueira said.
Excluding credit cards, Nubank's loan book stood at 332.7 million reais ($62.51 million) in the year to June 2020.
"We have so much more deposits than we can use in terms of funding, so we're hoping to deploy a lot of that capital in 2021 and help stimulate economic development," Junqueira said.
She added that when Nubank turns profitable would depend on how it paces expansion, but could be within 18 months. The company is in "no hurry" to list, she said.