Visa-backed PayMate withholds, delays salaries since April amid cash crunch
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Business-to-business (B2B) payments firm PayMate India Ltd has delayed salaries for several employees since April due to cash flow issues, four persons in the know toldMint. The delays come amid delayed funding and as the company has ramped up investments in international markets following a Reserve Bank of India (RBI) directive last year that destabilised its India business.
According to three of the people with knowledge of the matter who did not want to be named, the 100 employees of the company have received incomplete salaries in the past four months. In April, employees across levels were impacted. While some junior staff were paid in the following months, several senior employees have been waiting for their dues for at least two months. July salaries have not been disbursed so far, the persons confirmed.
There have been some junior and mid-level exits from the company due to the non-payment of salaries.
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The company recorded revenue from operations of $163 million for FY23, which dropped marginally after the RBI action to $162 million in FY24. The net loss for FY23 was $4.4 million, which expanded to $5.7 million in FY24.
The company has eight subsidiaries globally: PayMate Payments Services Provider LLC, PayMate Inc., PayMate Fintech (Pvt.) Ltd, PayMate India SPC, PayMate PTE Ltd, PayMate Fintech Co., PayMate Payment Services SDN Bhd (Malaysia), and Dunomo.
International expansion
PayMate confirmed the issue, attributing it to its ongoing 'ambitious" international expansion. In September 2024, the company announced a $400 million acquisition of Indonesian FinTech-as-a-Service firm DigiAsia's Indonesian operations. In June of this year, PayMate announced a strategic partnership with parent company DigiAsia to accelerate alignment ahead of the proposed acquisition of the Indonesian business.
'As with many rapidly scaling businesses, such phases can occasionally bring short-term operational challenges, including timing mismatches in cash flows. This has, unfortunately, impacted operational expenses in the short term," a PayMate spokesperson said, adding that the company has been actively resolving these issues. 'There have been salary disbursements in May as well as in June…All salaries will be regularised in July."
Despite local headwinds, PayMate is betting on growth in international markets such as Australia, Malaysia and Dubai, which have shown strong traction, one source said. They added that the company chose to make investments 'very fast" in some markets to catch the growth momentum, including some Software as a Service (SaaS) investments in Australia and in pharmaceutical companies in Malaysia.
On its website, the company said it is 'actively expanding" in key international markets such as Central Europe, Middle East, Africa and Asia-Pacific.
Waiting for funds
The firm is also awaiting a $30 million investment from Crimson Ventures, a US-based venture capital firm. The agreement was signed in March 2025, but the funds are yet to be received, sources said.
'Following completion of due diligence, they have entered into a definitive and binding agreement to invest in PayMate. The investment is progressing as planned and is a key component of our growth strategy," the spokesperson added.
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Factoring in the funding commitment, the company believes it does not require additional capital for core operations, and any future fundraising will be targeted toward strategic inorganic growth opportunities as part of our build-up to the proposed IPO.
However, one of the sources quoted above said that the delay in funding might possibly be due to the financial strain on the company's balance sheet, making the investors second-guess their funding or at least wait until a clear road map is in place.
Founded in 2006 by Ajay Adiseshann, Probir Roy, Vishvanathan Subramanian, and Anupam Mukerji, PayMate enables digital B2B payments for enterprises and SMEs across supply chains. It is backed by Visa, LightBox, Mayfield Fund, Brand Capital, and Recruit Strategic Partners. If the funding round from Crimson Ventures goes through, the company will have raised around $70 million to date.
Regulatory impact
The company's financial position also came under pressure earlier this year after the Reserve Bank of India restricted card network transactions routed through intermediaries. The move impacted PayMate and peers like Enkash.
'We have fully aligned our operations with evolving regulatory frameworks, including RBI guidelines concerning intermediary-led transactions. Our swift adoption of the Merchant-On-Record model has ensured continuity while further strengthening our compliance and governance framework," the company spokesperson said.
In February 2024, RBI cracked down on unauthorised payments through business cards, saying that it has observed that Visa has arrangements to allow such payments through certain intermediaries to entities that do not accept card payments.
Also Read: Why Adani public bond is a rarity in Indian debt market
The Merchant of Record (MoR) model involves a third-party entity that legally handles customer transactions, taking on the responsibilities of payment processing, tax compliance, and chargeback management. The 'merchant-on-record' acts as the seller to the customer, managing the financial and legal aspects of the sale, while the actual business focuses on product development and customer acquisition.
IPO bound
The fintech is also in the process of reviving plans for its public listing. PayMate had to withdraw its earlier ₹1,500 crore public issue after the Securities and Exchange Board of India (Sebi) returned the draft prospectus in January 2023.
'We are moving forward with our IPO plans for FY26. Preliminary work on the Draft Red Herring Prospectus (DRHP) has commenced, and we expect to announce our investment banking partners in the coming weeks. The company is well-positioned for its public market debut," the spokesperson said.
PayMate had first filed for an IPO in May 2022. The offer included a ₹1,125 crore fresh issue and a ₹375 crore offer for sale.
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