Digital payments startups in the country have continued to suffer heavy losses. Homegrown firms PhonePe and Paytm saw their losses more than double on a year-on-year as they are locked in a bitter battle for market share against India payment units of Google and Amazon.

Flipkart’s payments arm PhonePe has reported a loss of Rs 1,907 crore for fiscal 2019. It is a 141 percent increase compared to Rs 791 crore losses that the platform reported the year before. The revenue, however, has more than tripled in the same period, rising from 42.8 crore to Rs 184 crore.

It’s a similar story for Paytm. The Softbank and Alibaba-backed payments platform saw its losses spike 165 percent, going from Rs 1,490 crore in March 2018 to Rs 3,959 crore through the same month this year.

PhonePe was sold to Walmart as part of the $16 billion deal that the American giant struck with the Indian e-commerce platform in May 2018. PhonePe is now reported to be in the process of raising $1 billion independent of its parent. Other reports have suggested Walmart is keen to spin off PhonePe into a separate entity valued at $10 billion.

Paytm is run by its parent firm One97 Communications Limited and has raised funding from Japan-based Softbank Group as well as Chinese firm Alibaba Group.

Payment applications in India are locked in a tough fight to corner market share. Apart from PhonePe and Paytm, Amazon Pay, and Google Pay are major players in the country. The firms are pushing investments in the United Payments Interface (UPI), a government-run system to facilitate inter-bank transactions.

They are also spending significant sums in marketing to lure customers, adding to the losses.

First Published:Oct 31, 2019 12:56 PM IST