Key Points
Higher operating cost and inadequate revenue generation is weighing on digital payments startups, offsetting surging business volume due to the widespread adoption of digital payments in the country...
Payment processing charges, which fintech firms need to pass on to technology providers, banking partners or payment networks like the National Payments Corporation of India, Visa or Mastercard, have skyrocketed in recent times for most of the fast-growing players...
The lack of MDR or charges that merchants pay payment service providers on Unified Payments Interface (UPI) transactions has worsened the financial woes of fintech firms...
Similarly for Cred, which had a major revenue surge in FY23, payment processing charges rose more than fourfold to Rs 704 crore in FY23 from Rs 155 crore a year prior..
New generation fintechs are mostly processing UPI payments, which are not revenue generating, said industry insiders...
