Why Paytm Went Back To Basics In 2025 |
Reset, reposition, revive – perhaps these three words in this order can best describe the year for Paytm. Few Indian fintech firms have staged as dramatic a reversal as did the Vijay Shekhar Sharma-led startup in 2025.
From being whipped by the Reserve Bank of India with a crippling restriction on Paytm Payments Bank (PPBL), prohibiting fresh deposits and addition of new users, the company swung to a profit of INR 122.5 Cr in the first quarter of FY26 from a net loss exceeding INR 800 Cr just a year back. The topline and the EBITDA margin too improved sequentially during the year.
The regulatory action had not only battered its wallet ecosystem and deposit base, but also blurred its vision, making profitability increasingly elusive and even questioning its sustainability. Instead of running into the wreck, Paytm went for a strategic reset in 2025. Rather than trying to rebuild the payments bank, Paytm pivoted to regulatory clarity and regained monetisation strength through UPI payments, merchant acceptance devices, subscription revenue, and credit distribution under a default loss guarantee (DLG) model.
What played behind the turnaround in Paytm? A slew of measures – from focus on tested revenue drivers and scaling back of non-core verticals to reducing workforce costs by 10% by cutting down headcounts.
But, profitability alone does not confirm a sustainable revival. With the UPI turf simmering by the day, regulatory uncertainty escalating, and a lending landscape turning increasingly competitive, there is an inevitable doubt: Has Paytm’s revival translated into a structural momentum, or is it merely a cyclical rebound?
How Paytm Rebuilt Payments Without The Bank
The RBI whip on Payments Bank forced Paytm to confront a hard truth: its payments ecosystem had to function independently of its banking arm.
Paytm repositioned itself as a pure payments and merchant services platform, accelerating a transition that was already underway. This also meant that Sharma and his team had a task at hand to ensure continuity of the core revenue generating payments business with tie-ups with banks and focus on what is necessary.
A crucial pillar has been the UPI business, which was resilient, despite........