Latest news with #CCAvenue
Time of India
4 days ago
- Business
- Time of India
Digital payment firms in a no-win game as margins hit rock bottom
The digital payments ecosystem has become intensely competitive with the Reserve Bank of India issuing payment aggregator (PA) licences to more than 50 entities, pushing core transaction processing margins to what industry executives see as unsustainable levels. These aggregators facilitate digital payments for online merchants in categories such as ecommerce, food delivery and travel. With a crowded field and large players like Razorpay, Cashfree , PayU and Paytm slashing rates, newly licensed firms are finding it increasingly difficult to scale sustainably. As of May 2025, 54 companies have secured online PA licences from the RBI. In addition to dominant online players, several offline-first firms including MSwipe , Innoviti Payments and Pine Labs have expanded into online payments. Startups like PayGlocal and DigiO, which focus on recurring payments , have also entered the fray. 'The market has become so competitive that prices for processing each payment transaction have dropped to anywhere between 15 and 60 basis points,' said the chief executive of one of India's largest payment processors. 'Ideally, pricing should have hovered around 1% per transaction to make the business viable,' he added. 100 basis points is equal to 1%. Further, big players enter into subvention deals with their banking partners in lieu of large deposits and heavy volumes, which enable them to give attractive rates to clients. Smaller players cannot play this game, the chief executive said. Pricing wars Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories In some cases, the race for merchant acquisition has driven prices to zero. A Bengaluru-based payments founder told ET that several well-funded aggregators were recently offering card-based payments to large merchants at no charge. 'They might display a 2% rate on the website, but actual negotiations lead to significantly lower fees — or nothing at all,' he said. Infibeam Avenues , which operates listed payment platform CCAvenue, disclosed in its March quarter results that its net take rate was only 11 basis points in FY25. The net take rate is arrived at after bank commissions are taken out from the gross margins. 'The domestic payments business is becoming a challenge. Merchants don't want to pay, especially when competitors are offering such low rates. We cannot match that pricing at our scale,' said a senior executive at a newly licensed PA. The regulatory mandate that UPI-based transactions remain free of charge has further eroded industry margins, with players unable to monetise a large chunk of digital payments. After Paytm released its March quarter results , chief financial officer Madhur Deora acknowledged pressure from larger merchants and alluded to limited headroom for charging the full MDR (merchant discount rate) on UPI transactions. Pivoting to survive PAs are looking beyond core processing to retain margins. Most are either targeting niche segments or embedding payments into broader financial services. 'We expect to generate 2% to 4% of our revenue this year from value-added services — and grow that to 7% to 10% in coming years,' said Vishal Mehta, managing director at Infibeam Avenues. Segments such as recurring payments, cross-border transactions and enterprise pay-outs are gaining traction. 'We focus only on recurring payments via UPI AutoPay and NACH (National Automated Clearing House), where banks need a reliable product and good tech support,' said Sanket Nayak, founder of DigiO. The startup, backed by Groww and Rainmatter, integrates payment processing into its broader authentication suite. Rajeev Agrawal, chief executive officer at Innoviti, pointed out that as the market matures, there will be more verticalisation among PAs with each focusing on niche areas. Cross-border players such as PayGlocal and BriskPe (a PayU-backed firm) are betting on higher margins in international commerce. 'Cross-border GMV (gross merchandise value) is smaller than domestic volumes, but the take rates and revenues are significantly higher,' said the founder of one such firm. Despite deep discounting, there are early signs that the market may rationalise. Investors are now pressing portfolio companies to prioritise profitability over market share. 'We've seen this before. Remember the cashback wars in consumer payments? Paytm, PhonePe and Google Pay eventually scaled back,' said the founder of a mid-sized PA. 'Just last week, my sales team flagged a rival offering payments for free. I told them — stick to the basics. The burn won't last forever.' But industry insiders also agree that the market dynamics will eventually get the PA industry to settle for four to five major players, just like what was seen in the offline merchant payments space.
Fashion Network
02-06-2025
- Business
- Fashion Network
Infibeam Avenues Q4 net profit rises 20 percent to Rs 55 crore
B2B payments firm Infibeam Avenues posted a 20 percent increase in consolidated net profit to Rs 55 crore for the March quarter, as against Rs 47 crore in the year-ago period. The company's revenue for the quarter grew 62 percent year-on-year to Rs 1,160 crore. For the full financial year, consolidated net profit rose 51 percent to Rs 236 crore while consolidated revenue grew to Rs 3,992 crore from Rs 3,150 crore in the previous year. The payments segment, which includes the CCAvenue payment gateway and other related services, remained the primary revenue driver, contributing over Rs 3,786 crore to the full-year top line. The e-commerce platform business added another Rs 20 crore to revenue. Commenting on the results, Vishal Mehta, chairman managing director of Infibeam in a statement said, 'Our continued expansion in the Middle East and our foray into the AI space with new, transformative offerings are setting the stage for the next phase of growth. As part of this vision, we plan to invest up to USD 100 million over the next three years in advancing our AI capabilities—from intelligent payment solutions to next-generation infrastructure.'
Time of India
26-05-2025
- Business
- Time of India
Infibeam Avenues FY25 net profit up 5% at Rs 160 crore; revenue jumps 27%
Gandhinagar-based Infibeam Avenues , which runs the CCAvenue payment gateway , has reported a consolidated operational revenue of Rs 3,774 crore in fiscal 2025, up 27% from Rs 2,961 crore a year ago. In terms of profit after tax (PAT), the company saw a 5% increase to Rs 160 crore from around Rs 152 crore last year. In the March quarter, Infibeam Avenues reported operating revenue of Rs 1,098 crore, up 65% from Rs 665 crore a year back. Closing FY2025, the RBI-licensed payment aggregator said that it wants to get into consumer payments through Unified Payments Interface (UPI). The company is building a UPI third-party payment app Rediff Pay . Infibeam Avenues acquired a 54% stake in Rediff in August 2024. For the entire business, which includes the domestic payment business, international payments, and businesses from its subsidiary entities, the overall payment value settled by the platform stood at Rs 8.67 lakh crore, up 24% from Rs 7 lakh crore last year. The company said that its net take rate (revenue per transaction) improved to 11.7 basis points (bps) in FY25 from 8.8 bps in FY24. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories As a payment gateway, the company has to share its revenue with banks and other financial institutions. The net revenue that was reported by CCAvenue stood at Rs 525 crore in FY24 compared to Rs 419 crore a year back. Infibeam Avenues has also taken board approval to raise up to Rs 700 crore through a rights issue. The funding will be aimed at developing new business areas like consumer payments, international expansion, and investments in its artificial intelligence (AI) initiatives.
