Digital payments major Paytm has reiterated that its business, profitability and long-term revenue model are not dependent on the Payment Infrastructure Development Fund (PIDF), even as uncertainty around the scheme weighed on investor sentiment last week.
Speaking during the company’s Q3 earnings call, Vijay Shekhar Sharma said Paytm expects to offset a significant portion of the impact arising from the potential non-extension of the PIDF scheme in the near term, while gradually neutralising it over time.
“We should be able to offset at least 30–40% of the impact from the PIDF scheme in this quarter. There will be an EBITDA impact in Q4, but we will offset more of the impact over a period of time,” Sharma said.
He added that the company plans to mitigate the PIDF hit through subscription revenues and cross-selling of financial services, underlining that Paytm’s current business model does not rely on regulatory incentives. “We are certain that we will not need PIDF in our business model,” he said.
Sharma acknowledged that, as an industry, digital payments players welcome schemes like PIDF, but firmly stated that “we are not dependent on PIDF for our business, profits and revenue.” He emphasised that while the extension of payments infrastructure to hinterlands was initially costly, incentives under PIDF helped offset device deployment costs in underserved regions. Sharma underlined that today, the use case for mobile payments across India is evidently clear, with strong adoption across urban and rural markets alike.
The clarification comes amid heightened investor focus on the PIDF scheme and its potential expiry. Paytm noted that the incentives under the scheme were recognised according to RBI circulars, and in the absence of any formal extension or replacement, the company expects to “significantly offset the impact over time through a combination of higher revenues and more targeted sales efforts.”
Stock fell 10% last week on reports of RBI not extending the PIDF scheme
The PIDF, launched by the Reserve Bank of India (RBI) to accelerate digital payment infrastructure deployment, particularly in Tier-3 to Tier-6 centres, subsidises devices such as PoS terminals, soundboxes and QR codes. The incentives have been widely seen as a catalyst for deepening merchant and remote market penetration.
However, the scheme’s tenure ended on 31 December 2025, and there has been no confirmation from the RBI on an extension, fuelling market nervousness. As a result, Paytm’s stock fell sharply last week, dropping around 10% in a single trading session and recording its biggest one-day slide in over a year as investors weighed the implications of potential loss of PIDF incentives.
Market context and future prospects
Despite the recent volatility, brokerage houses maintain a longer-term positive view on Paytm’s core business fundamentals. Several analysts point to the company’s strong digital payments ecosystem, broad merchant base, and diversified revenue streams – including financial services and lending – as key growth drivers post-PIDF. Independent brokerages have also reiterated buy ratings, highlighting Paytm’s deep tech infrastructure and scalable business model.
With RBI clarity on the horizon and Paytm’s recent earnings call reaffirming internal confidence in offsetting any loss of incentives, the market now awaits further updates on strategy execution and guidance for upcoming quarters.
