One 97 Communications, the parent of Paytm, has emerged as the fastest-growing large player on India’s UPI rails, silencing critics about its ability to win back the Indian consumer at scale, as well as showing consistent market share growth in a fiercely contested market.
In its Q4 FY26 earnings release filed last week, the company reported that consumer UPI gross transaction value (GTV) grew 46% year-on-year to Rs 5.5 lakh crore in the March quarter, more than double (2.2x) the industry’s 21% growth rate. In FY26, Paytm has now posted consumer market share gains in every single month of the past year, a twelve-month streak few of its peers have managed to match.
Monthly transacting users on the platform expanded by 50 lakh year-on-year to 7.7 crore, reflecting that One 97 Communications is not only attracting new consumers but is also deepening engagement with the ones it already has.
The Noida-based payments major attributed this consistent growth to product-led innovation and AI-led consumer acquisition and retention. Over the past year, the company has launched several features on its app, to increase consumer engagement including features like Built-in Calculator, Hide Payment, Payment Reminder, and AI-based personalised tools such as Monthly AI Spend Summary.
Paytm’s AI strategy, repeatedly flagged by the leadership as central to its growth roadmap, is now visible in the consumer experience. Smarter transaction search, auto-tagging, contextual reminders for recurring payments, fraud-pattern detection, and a more responsive in-app assistant are reducing friction at exactly the moments that matter most for high-frequency users.
As part of its earnings commentary, Paytm said its investments in AI-led product innovation are beginning to translate into market share gains and improved monetisation, with the full-year impact expected to reflect in FY27.
“Investments in AI-led product innovation are reflecting in market share gains and monetisation. Momentum seen in payments, loan distribution and wealth, with full-year benefit expected in FY2027,” the company said in its Q4 earnings release.
Further, Paytm said its AI-led transformation is expected to drive operating leverage, with revenue and contribution profit projected to grow significantly faster than indirect expenses, supporting further expansion in EBITDA margins.
“Revenue and contribution profit are expected to grow meaningfully faster than indirect expenses led by AI applications across our businesses, supporting further EBITDA margin expansion,” the company said.
Paytm’s rising UPI market share is being reinforced by a sharper focus on high-quality users, who transact more frequently and engage deeper across the app. The company has also signalled a deliberate shift toward acquiring high-quality users, prioritising engaged, transacting consumers over headline download numbers.
“What’s far more important is that customer engagement has risen dramatically across the platform. The market share gains we’re seeing are significantly outpacing MTU growth reinforcing that quality of customers and depth of engagement matters more than just headline user numbers,” said Paytm President and Group CFO, Madhur Deora, during the company’s Q4 analyst call, post results.
With high-quality customers in the net, the company remains focused on achieving the ‘highest monetisation per user’, cross-selling a range of financial services including credit through Paytm Postpaid and personal loans, alongside wealth offerings such as equity broking, MTF, mutual fund SIPs and Digital Gold via its Paytm Money and Paytm Gold franchises.
“We’re seeing deeper engagement from high-quality, long-tenured customers leading to higher credit card usage and stronger financial activity. GMV growth is accelerating not because of more MTUs, but also because customers are using Paytm more. Our focus remains on customer and product quality, as well as engagement, not just volume,” said Paytm founder and chief Vijay Shekhar Sharma, as part of the company’s analyst call last week.
Paytm, which largely operates as a distributor of financial services products, reported a 36 per cent jump in total customers availing financial services on the platform, an addition of 2 lakh users, taking the base to 7.5 lakh at the end of the March quarter. Revenue from financial services distribution grew 38% to Rs 750 crore in Q4 FY26.
Global brokerages including Bernstein, Goldman Sachs, Citi and Jefferies have retained bullish ratings on Paytm after the fintech’s March quarter results came in ahead of street estimates, with the company posting its first full year of profit at Rs 552 crore in FY26.
Brokerages flagged the revenue beat, sustained margin expansion in the core payments business, and improving operating leverage as the key takeaways.