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    Both Paytm and PhonePe Expand Travel Services Amid Growing Market Demand

    Two digital payments companies, Paytm and PhonePe, have announced an expansion in their travel booking services: Paytm through its multiple partnerships with Travel Meta Platforms including Skyscanner, Google Flights, and Wego, and PhonePe through its partnership extension with travel company ixigo. These expansions suggest that travel services may become a significant revenue stream for fintech companies.

    Paytm’s growth in the travel sector:

    In a stock exchange filing, Paytm’s parent company One97 Communications announced that the payments company has partnered with Skyscanner, Google Flights, and Wego, services that allow users to compare flight ticket services, in a bid to increase its market share in the travel landscape. Detailing their growth in the flight ticket sector, the filing noted that Paytm Flight’s passengers grew by 19% YoY and their international ticket bookings in April saw a 15% YoY rise. It also noted that it has expanded its international flyers to include Cambodia Angkor Air, SalamAir, and FlyDubai.

    Paytm has also reportedly observed growth in its train travel bookings becoming the second-largest Online Travel Aggregator (OTA) in train bookings in Q4’24. Similarly, the platform has expanded to host new bus operators including Mettur.

    Paytm’s bet on travel:

    Following the regulatory action against PayTM Payments Bank Limited (PPBL) by the RBI in February, Paytm reported a low operating revenue of 2267 crore in March 2024 from a high-point in December 2023 of 2850 crore, a 20% QoQ. Similarly, the contribution profit had a 15% QoQ decline to reach 1288 crore in March 2024 from 1520 crore in December 2023. It also reported that its Monthly Transacting Users (MTU) were down by 24% in April as compared to January, from 10.4 cr to 8 cr.

    In its financial result,  it emphasized that it would be focusing on creating “a leaner organization structure and the pruning of non-core businesses”, as its strategy going forward. This is evidenced by Paytm General Insurance Limited (PGIL) withdrawing its application for registration as a general insurance company and reports of the fintech company engaging in preliminary talks to allow Zomato to acquire its ticketing and entertainment business.

    Yet, Paytm has chosen to expand its travel business. In its earnings call for the last quarter President and Group CFO, Madhur Deora, said, “Marketing services is a high margin business for us which is an upsell on our payments consumer base and this consists of travel, advertising, and credit cards largely.” When asked further about the marketing services, Founder and CEO, Vijay Shekhar Sharma, said, “Marketing services, we more or less see as a support to the payment business.” Deora noted that while travel and advertising revenues were impacted due to lower MTUs, “as we see stabilization and growth in our customer base, we should see this business scale up again.”

    PhonePe’s extended partnership with ixigo:

    PhonePe and ixigo also announced that they would be expanding their partnership beyond integrating ixigo’s train bookings service ConfirmTkt with PhonePe. Users will now be able to book flights with ixigo Flights and buses with AbhiBus.

    Both ixigo and PhonePe have noted that there seems to be a growing demand for travel services. Sameer Nigam, Founder & CEO of PhonePe, noted that, “With rising disposable incomes and growing aspirations of Indian travelers, we are seeing rapid adoption of our travel offerings.”Aloke Bajpai, Group CEO of ixigo, and Rajnish Kumar, Group Co-CEO of ixigo,  also noted that “PhonePe’s growing penetration in smaller towns”  was likely to benefit travelers from Tier 2 and Tier 3 cities who wish to leverage ixigo’s products.

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    The post Both Paytm and PhonePe Expand Travel Services Amid Growing Market Demand appeared first on MEDIANAMA.

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