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Infibeam Avenues Ltd
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Ladies and gentlemen, good day, and welcome to Infibeam Avenues Limited Q3 FY '23 Earnings Conference Call hosted by Go India Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rajat Gupta from Go India Advisors. Thank you, and over to you, sir.
Yes. Thank you, Lizan. Good afternoon, everyone, and welcome to Infibeam Avenues Limited earnings call to discuss the Q3 and 9 months FY '23 results. We have on the call with us today, Mr. Vishal Mehta, Managing Director; Mr. Vishwas Patel, Executive Director; Mr. Sunil Bhagat, Chief Financial Officer; and Mr. Purvesh Parekh, Head, Investor Relations. Also joining us on the call today is Mr. B. Ravi, who is advising Infibeam corporate and financial strategy as an independent consultant. We must remind you that the discussion on today's call may include certain forward-looking statements and must be, therefore, viewed in conjunction with the risk that the company faces.
I now request the MD, Mr. Vishal Mehta to give us through the company's business outlook and financial highlights, subsequent to which we'll open the floor for Q&A. Thank you, and over to you, sir.
Good evening, and welcome, everyone. On behalf of the entire Infibeam family, I wish you all a very happy and prosperous 2023. To start with, I'm very confident that 2023 will be a great year for our country. And more importantly, this decade, we'll see India reaching new heights, where the GDP is expected to cross $5 trillion, putting us the #3 spot globally.
One of the studies that have been done across so many nations on use of electronic payments. What has been coming out of the study is that nearly $1 trillion have been added to GDP of various countries, and it has been able to raise consumption. So digital payments is expected to play a very important role in terms of our country achieving certain GDP expectations.
Digital payments in India grew more than 70% in FY '22, and it is estimated to grow by 45% to 50% in FY '23 to approximately INR 54 trillion or USD 675 billion. Between 2021 and 2026, the industry is expected to grow in the range of 30% to 40% annually. The government and the regulator are also very supportive given the vision to make India Digital and also turn in India into a cashless economy.
To capture the asset growth, we have charted with very clear strategies, and we're working on certain initiatives like the omnichannel payment solution that will deploy across more than the million devices by end of FY '24. The next is industry-specific vertical solutions for deep industry penetration, like what we offer to the hospitality industry and the hotel industry to revenue, bill payments for utility and recurring payments through Bharat Bill Pay, certifications of processing airline transactions covering more than 20-plus airlines; solution for auto insurance; payment infrastructure as well as B2B payments and payments for banks.
We are constantly solving industry problems through payment solutions that really matter the consumer and merchants. And now we have achieved another milestone of being the industry's first to process digital rupee transaction for online retail payments. We are ready to go live with any bank that offers or that wants to offer digital rupee.
We are in discussion with several banks, and we are also getting inbound requests from many banks to partner with us. And government and RBI looks to curtail cash of INR 32 lakh crores. which is almost USD 400 million. Also the addressable market, we believe we are promoting the use of digital rupee to avoid certain cash costs like printing, avoiding currency manipulations, ability to track the currency, et cetera.
RBI has requested banks to quickly lead the technology infrastructure and onboard new merchants to illustrate India's own digital currency across the country. We are currently among the only few to be able to onboard new merchants. This will enable us to build a very strong pipeline for future to upsell and cross-sell, while also giving us a lead position in processing digital rupee transactions.
We believe just like UPI created a revolution in digital payments. In the same way, e-rupee will create the next evolution for India as it is in true sense, a real-time money transfer with instant settlement to merchants. One of the reasons why we believe so is because it is exactly the same as cash, but in a digital format. Even UPI today is not instantly settled and follows the same process like any payment options of T plus n number of days settlement.
The use case for digital rupee can be many, many, and this will create new opportunities in the digital payment space. With that said, last quarter was very strong for us. We onboarded more than 0.5 million merchants in Q3 alone. In the Payment retail business alone, which is -- we have the history of more than 20-plus years, and we've overall added a record 1.1 million merchants in the single quarter. So all other offerings, reaching 8.4 million merchants, an increase of 72% year-over-year.
And over daily merchant addition averaged 11,500 -- 11,700 for last quarter, which is hovering around 7,000 to 8,000 in the last few quarters. Number of merchants in the payment gateway business in Q3 grew by 385% year-over-year. As the digital payment industry looks right for growth in India with strong entry by areas and strict compliances, we plan to take the most advantage of being able to onboard new merchants.
As mentioned in our call last quarter about the international launches in the second half of FY '23, payments in Saudi Arabia is now live. We are really one of the top 2 providers of payment gateway in UAE and Saudi Arabia being live, we've onboarded several merchants and will subsequently provide updates on other geographies in coming quarters.
If you look at going into FY '24, we'll extend these geographies and talk about other launches as we build more tie-ups and onboard more partners. GeM continues to remain strong. GeM achieved a processing volume of 1 crore of order value in November. In the 8 months of FY '23 versus achieving the same number in 12 months of FY '22.
As per GeM announcements, GeM is expected in targeting to touch order values of INR 2 lakh crores by FY '23, which is twice that of FY '22. By end of January 2023 order volume and value on GeM has already crossed 1.5 crores, doing INR 50,000 crores in just 2 months of December and January.
Across the GeM, we continue to explore more opportunities in our software platform business to widen our offerings in the client partnerships. We will keep you updated on the developments. To sum up, I'm extremely confident and happy with the progress that we have made in the business, including improvements in the net take rates in our payments business, which we intend to take to double digits by FY '25.
We see very strong tailwinds for digital payment industry and believe that the game is still not over. There is so much innovations and opportunities that constantly arise. And we feel that with prudent policies, compliances, safeguarding the consumers and merchants and all these profitable business models will be able to pay off in the long term.
I will now hand over the call to Vishwas who will give you an update for our payments business. Vishwas, over to you.
Thank you, Vishal, and good afternoon, everyone. Q3 is a strong quarter for PB videos for payments business being a festive and travel-related quarter. We experienced a strong merchant pipeline during the quarter. In Q3, we focused on quality rather than quantity to build a long-term sustainable business, whereby we were able to increase our take rates and hence profitability in the business. Change in payment mix towards noncredit payment options led to a lower gross take rate and hence, moderated gross revenue, but the net take rates increased as on credit payment options, net banking debit card contributes increase, which are more profitable for the company, leading to better profitability.
Merchants seems to have chosen more debit options in this quarter to save on the MDR cost. This resulted in higher earnings for us as we provide 60-plus net banking options to direct integration with the bank's core banking solutions, highest globally and over 100-plus debit card options. Contribution from 0 MDR payment options in the quarter have gone up from nearly 6%, 7% to roughly 10%. The subsidy incentives that are announced by the government on 0 MDR or noncapable payment options like UPI and RuPay debit card in the current fiscal, government has increased it by 2x for [ INR 2,137 ] crores from the previous INR 1,400-odd crores in the previous year. We hope to receive our share in Q4 or Q1 of next year -- of next financial year. The industry demand, however, remains at INR 8,000 crores from the government. To date, fintech and PGs have not received anything from the government, what the government has said shared with our banks, inclusive of previous years.
Now let me give you a quick update on our investments go payments that is instant. NPV Avenues has invested INR 16 crores in copayments increasing its stake to 54.80% from the current 52.38%. Go Payments as an offline business model, targeting the unbanked and under bank. The business has significantly impacted during the 2 years of COVID and its 4 years of operational history. However, the company has managed to quickly turn around and scale the business last calendar year and some EBITDA positive in December 2022.
We are extremely proud of the management who have turned into profitability such as sort spend during the challenging environment both in terms of the pandemic and the competition by focusing on a core philosophy to generate profitable revenue and offer quality services. Our investment in Go will help go to scale further and achieve profitability while scaling the business. This will help NPV achieve higher return on investment and benefit all the shareholders of Infibeam Avenues.
As far as the international operations are concerned, UAE is still going very strong. We have commercially started operations in Saudi Arabia, and we will scale this from next financial year. We're also in the process of rolling out our CCAvenue all-in-one-app, that stepped in DCC soon as it is a very market for TAP-based payments.
According to Visa study, contactless payments are among the highest in the GCC region. As out of total digital payments, 94% are contactless in Saudi Arabia and 92% in UAE. Finally, our comprehensive set of payments and software payment solutions platform solutions supports all the digital payments, accepted requirements of the merchant, be it in-store, online or omnichannel payments along with the tools for the merchants to enable e-commerce.
With this, I now hand over the call to Sunil Bhagat, our Group Chief Financial Officer. Over to you, Sunil bhai.
Thank you, Vishwas. Good evening, everyone. We are extremely pleased with our performance in Q3 as we work towards improving the quality of our earnings. We were severally impacted during COVID from lower business volumes, low-margin businesses like utility, education, insurance, et cetera, and severe pricing competition.
However, Infibeam focused on profitable revenue growth by ensuring quality customer onboarding, strengthening ties with ecosystem partners, expanding high-margin e-payment businesses, growing the infrastructure services, strengthening international markets, et cetera.
If you look at our stand-alone performance for 5 years from FY '18 to FY '23 from comprising in Infibeam, India payments and software payment businesses, including the GeM portal. The growth in profit after tax is approximately 10x. The company will continue to focus on its core business philosophy of profitable revenue growth and strive to bring the same in the next X in this decade from various strategic initiatives, and we are -- we will undertake that.
Q3 is a seasonably strong quarter for Infibeam. The payments business net take rate grew by 63% year-over-year to 8.9 bps. The company is taking steps towards growing its net across payments vertical and reach double-digit take rates in FY '25. Improvement in net take rate led to high net revenue, generating better operating and profitability margins during the quarter. On a like-to-like basis, consolidated PAT for the quarter was INR 27 crores, up 11% year-over-year and highest among the 3 quarters reported PAT. And like-to-like standalone PAT for Q3 was INR 24 crores, up 28% year-over-year.
Overall, we are on track to process transactions for INR 7.5 lakh crores for FY '25. With this, I now hand over the call to the operator for starting Q&A. Thank you.
[Operator Instructions] The first question is from the line of Rahul Bhangadia from Lucky Investment Managers.
Congratulations on a very good set of numbers. Sir, you have mentioned in the previous call also and just a while back, you mentioned that you intend to take your net take rate to double digits for FY '25. Given that GeM will be a big driver of our TPV, and that is unlikely to be anywhere close to double digits. How do you find out...
Rahul, sir, your audio finding is very muffled. Can you come more closer to the mic? Yes. .
Am I audible now?
Much better, sir.
Sir, given that GeM will be one the bigger driving factors in the TPV growth of the company and where the take rates are of the order of, let's say, 7 bps. How do you kind of -- how does the math work out? Or where will that double-digit kind of number come from?
So Rahul, there are 3 things that we are focused on. Internationally, our take rates of 15 basis points compared to India. So if you look at our projections for the next amount to '25, we expect that today, a single-digit percentage of our revenues come from international. We expect that to go into double digits.
So based on what we believe we should get to 20% to 30% of our revenues in the next 2 years to come from international growth as well. And international take rates are far better today compared to take rates in India. So that's one part. The second thing is that we expect to actually introduce off-line payments that is TapPay we want to add. So we believe that if we are at 8.1 merchants, we should get to 10 million merchants.
And over there, since the card is present, we expect that the take rate should be better in the off-line setup compared to the online setup where the card is not present. We have also filed certain patents around those areas and we expect that with certain kinds of SDKs that we open up, where you literally don't have to do anything, plug in and stick into the existing payment setup of yours and start processing payments.
So our expectation is that going to 1 million, that is a more than 10% per merchant base, you will see perhaps some improvements in that area as well. And the third thing that Sunil just highlighted, which is we are focused on profitable sectors.
So we have taken up sectors where we believe the value is pretty strong. Today, the overall growth in payments is expected to increase significantly. So a combination of those factors, we believe that we will be able to get to a better take rate.
Today, we are at 8.9. We are not calling up saying that we can do it next quarter. What we believe is that let's make sure that we have built out strong thesis around how we can get to double digits, which is what we are focused on today...
Rahul, just to add, the double digits that we are talking about is for the payments business. GeM is a single customer where the take rates are already contracted. So we are not including GeM as part of double digit. It's only the payment business where we are talking about double digits.
Okay. So then on a -- let's say, on a weighted average basis, we might still be around the 8 or 9 bps number only, right?
Perhaps that will depend upon what is the weightage of TPV coming from payments and coming from the GeM.
That was important. And just a question on the GeM portal relevant theme. When does the process start and by when will we know the end results?
Basically, the RFP has been out and current positioning is that by end of this month, that they will be taking the bids. So very likely in the next few weeks, we will know. Just to let you know, it is 18 months until you actually build out the new fix this contract will continue until 2024.
Sorry, I didn't get the last part, or 18 months a bid, I didn't get that.
The new states that you need to build out the framework in the next 18 months before existing opportunities will move on to the new framework. So the existing contract, which we have will go on until 2024.
So does that mean that when you shift to a new framework, whatever work you have done in the last 5 years, does that is a buildup on that? Or it's a separate all together? How does that work?
It is a separate thing. So in other words, there may be some base that can potentially be common. I think a lot of systems processes, integration, so on and so forth are in place. But there are certain requirement that government has, which is additional functionality on top of whatever we have provided so far. So I think there is -- if you go through the RFP, you will see that there is a payment of INR 135-odd crores towards buildup of the new framework. And then there is a fixed variable that goes on every quarter.
Okay. And should we expect your consortium to bid as it was in the previous tenure?
We still have 3 weeks left. So there may be a few changes. But yes, we expect that definitely we are bidding.
Right. And sir, just 1 final question, if I may, please. You don't have a non-transaction revenue recorded in this quarter. Has that been plumbed with the transaction-based revenue or just trying to get an understanding this?
There is the platform revenue includes GeM revenue and the nontransaction revenue. So the entire platform revenue has 2 parts, 1 part coming from GeM, which is the transaction revenue. The other part is non-transaction.
So see, you have a net take rate of INR 85 crores is this quarter that you have declared. A part of that will also be in a non-transactional, that's how it is.
Sorry INR 85 crores, I didn't get that.
INR 85 crores is the transaction-based revenue, the net take rate.
INR 85 crores. Sir, can I take this offline with you because I think.
I'll take this offline.
The next question is from the line of Akshay Doshi from Encore Capital.
Congratulation on the good set of number. Sir, I had around 3 questions. The first question is that you had guided for a TPV of INR 4 lakh crores for this year-end FY '23. In 9 months, you were able to achieve around INR 2.7 lakh crores. So sir, going ahead, how confident we are to achieve the balance INR 1.25 lakh crores? And also if possible, you can share the January numbers of TPV?
Sure. So if you look at our numbers for the last quarter on a consolidated basis, we do about INR 95,000-odd crores in transaction processing volume. So the question is that are we able to gap the INR 1 lakh crores, INR 95 crores INR 1 lakh crore to 1.25. Generally, we see Q4 being very strong in certain verticals and GeM being one of them because a lot of buying -- government buying happens in the last quarter.
So we are tracking it up. If you look at just the normal transactions of applying Q3 to Q4, we expect that even in Q4 so far has been very strong for us. So while you don't talk specifically about months, what we know is that today, we are tracking to the number closer to INR 4 lakh crores. And GeM, of course, like I said, the last 3 months for GeM typically are very strong months.
So what you will see is that government spends significant amount of capital towards in the last 3 months of the year. So we expect that, yes, we will see numbers which are closer to INR 4 lakh crores. Today, we believe that we are tracking to that number.
Okay. Okay. Sir, the understood. And sir, my second question was like, what is the update on TapPay, like how many merchants have we onboarded? How is the progress going on there? And what is your target for the next financial year?
Yes. So I'll start and Vishwas can add in. What we had communicated last time was that we would like to reach 100,000-odd merchants by year-end, this year-end, which is March '23. And next year, we'd like to grow to 1 million merchants, which is about 10 lakh merchants by end of '24. So we've laid out our strategy in terms of how to achieve it.
We have -- we believe that 100,000, we will be on track to achieve by end of this year, which is FY '23, you will start seeing, hopefully, next year, off-line QR codes and many others, which is CCAvenue QR codes in off-line payments because once we reach a critical mass of 1 million merchants, then that is wherever you see certain QR codes, which are more UPI-related, you will start saying CCAvenue TapPay QR codes as well for merchants.
So I believe that this year, we'll definitely reach 100,000 merchants. And next year, we should be tracking to 1 million merchants. And I think it's a combination of both CCAvenue TapPay as well as allowing our SDK. I don't know whether you're aware, but even if we give out our SDK, which is a software development kit for someone to integrate into existing payments, it requires a set of approvals from card networks because one needs to actually ensure that security has been taken care of, which is the utmost importance.
And anyone and everyone who actually uses an existing payment provider can actually allow people and consumers to tap and pay. So we are happy to announce that we have been approved by card networks for our SDK to be integrated into existing payments network and which means that the million looks very doable for us for next year.
Okay. Understood. And sir, my last question was on your gross revenue. So -- if I look at the quarterly numbers from Q2 to Q3, it has been reduced from INR 477 crores to INR 415 crores. Sir any reasons around that?
We've mentioned that the -- Vishwas, go ahead.
Yes. So essentially we have like 100-plus million payment options that is credit card, debit card, net banking and others. So credit card, typically, the usage, the MDR is high expectation, merchants are more and more pushing towards net banking and the debit cards and other options, right? Our earnings on credit card is less than what we earn on net banking and other options. So merchants started pushing, even if you see on many checkout or websites, we are pushing on the debit options more, so that their cost goes down. MDR cost goes down, right? For us, it's better if we move towards net banking and debit cards and other things. So hence, you will see that though the gross revenue has come down marginally to INR 415 crores, what had take rate and profitability has increased considerably this quarter. So even our take rate now has gone from -- what is it 7.2 to 8.9 bps? Just correct me.
From 7.5 to 8.9.
Yes. So from 7.5 bps to 8.9. So our take rate and profitability has improved.
[Operator Instructions] The next question is from the line of Amit Raj from Anupati Advisors.
So first question is in terms of the TPV guidance. So sir, what percentage of TPV do you expect coming from GeM portal in the guidance of INR 7 lakh crores to INR 7.5 lakh crores for FY '25?
So we believe that today, if you look into it, approximately close to INR 1.6 lakh crores to INR 1.7 lakh crores comes from payments. And that is expected to continuously increase. In fact, we expect that payments will significantly be larger in the coming few quarters. But if you look at the perspective of forecast that we have developed, we think if it is INR 2 lakh crores for this year will be conservative for the next 2 years. And we expect that maybe that 2 will be 3.5. So payments will get to about INR 4 lakh crores.
Okay. Okay. And at the time of renewal of this contract, are we expecting any reduction in the take rate from 7 bps to, let's say, 5 or 6 bps considering the strong increase in volume of GeM?
Yes, absolutely. What -- if you look at how the contract is structured, there is fixed and variable this time around. If you remember last time when we bid for the contract, it was all variable. So in other words, there is a fixed component that comes every quarter, post deployment. So there is an amount that comes predeployment, which is the onetime amount which is about close to INR 130-odd crores.
And then there is post-deployment amount that comes every quarter. And then there is a variable component on top of it. So if you look at the blending of that and depending upon the number of transactions, the kind of transactions, one can make assumptions and come up with certain take rates.
But yes, we would expect that based on the volumes, the volumes increase and we have taken a very conservative approach. I'm sure that could be aggressive approaches as well. But we are planning for a conservative setup. And do you think that there may be a marginal impact to the take rates that we get from GeM today versus what we'll achieve given that the volumes will be higher. But it's a slightly calculus formula because it is based on number of transactions, the value of transactions and a few other parameters.
Okay. Okay. Okay. And third question, sir, can you please explain our revenue model in processing the digital rupee transaction?
So Vishwas here. So as of now, there is no revenue model in the digital rupee. It's just coming out. So the right now only test pilot stage is going on. And typically be when the option is enabled across merchants and the volume comes in. So that kind of a regime and it's up to the Reserve Bank of India to put in a mechanism where there is some money to be made by the service providers who are going to activate this across the country.
So right now, it's just a test pilot. So it's like -- it's INR 32 lakh crores of cash in the market. So this is the UPI movement to disrupt cash, right? So it's an a digital format, it comes like in a lot currency and it transfers and transfers. So in real-time checkout mechanism in online, where we have enabled how does a pay cash through the digital rupee.
So all those mechanisms are all quite innovative to the first in the world right now. So going on to the MPR and this mechanism on revenue, it's too a little early, maybe in the next 1 or 2 quarters, there will be more clarity on all the pricing and mechanism and even in fact processes of chargeback and other things also will come in place.
[Operator Instructions] The next question the line of Jain from Lucky Investment Managers.
I wanted to ask that this change in transaction mix from credit-based payment options to noncredit-based payment options, which has led to lower gross revenues for us this quarter. So was there some special trigger this quarter because we're seeing -- I mean, we have recorded lower gross revenues Q-on-Q for the first time this quarter. So was there some special trigger this quarter?
Yes, there was 1 trigger, which is a lot of competitors. They started giving portfolio rates to clients. Portfolio rates meaning a single rate across different payment options. And so whether your mix is X or Y that you get a single rate and there are several clients where Vishwas can add to it more, but the point was that there are certain take rates different than debit and other payment options.
And so what has ended up happening is that wherever the payment options of credit were lower for a merchant base to trans -- it made sense for them to start sending transactions there, whereas -- and we were perfectly fine with that approach because obviously, the rest of the volume came to us because we were better than those.
So I think there's a slight impact there. Second, what Vishwas said was that merchants started pushing noncredit options because in credit, they will lose a lot more compared to other payment options. So as a noncredit payment options. So for the merchant also, it makes sense to start pushing the noncredit options because it's more lucrative for them compared to credit. And so a combination of those 2 triggered the gross revenue.
Okay. Sir, just for the clarification, sir, on the first factor that you mentioned. You said that the volume came to us because we offered better rates to the clients than some by our competitors is that right?
When you offer a single window across payment options, for the sake of argument based on the mix you would want to -- if somebody approaches and say that here's the single take rate. Merchants as smart enough, they will start sending the options where they are getting benefits. And of course, for noncredit-based options, even if you keep and maintain our same rates, obviously, they will prefer us.
So I think it was not about getting better rates. It was just like an option for the merchants to send volumes to us. That is one. And second is that merchants also have started pushing a lot of noncredit options to us given that it is more lucrative for them to process those for customers compared to credit-based options.
Just to simplify it. So typically, some of the competitors are offering a merchant, a rate of, say, 1.85 across all options, say, a credit card, debit card, net banking and all those things, right? So 1.8 across all merchants. We typically used to give credit card at 1.92% and net banking at 1.25% and other rates that we have, right?
Our earnings on net banking were any way higher than what you used to earn on credit card. So when a merchant started to do some of the bigger ones that we had, give a credit start to add 1.85% to them. But all the net banking, which used to go earlier with different since we are at 1.25 and the take rate that is at 1.8% for them, pushing all other debit options of net banking and others on class.
Hence, you see a spike in the volumes. You see a spike in the take rate and this thing. But yes, gross revenue will come down a little bit because of the payment mix change.
The next question is from the line of Dipesh from Manya Finance.
Am I audible?
Yes.
Forward, how much percentage credit and noncredit volumes come in?
Credit is about 1/3, about 23%, 25% and noncredit will be the rest, which is ongoing debit cards, net banking, et cetera.
And going forward, do we see these volumes of noncredit going, I mean, increases?
So primarily, if you look, look, India is a debit society like unlike the people in the West who live off on credit, right? India, China and others is the ASEAN region are more debit societies, where if you have money only, then you spend, you will not go overboard on credit and other things, right? So that's why the credit card uptake has been stagnant. If you see the overall credit card numbers also last -- every month, it's always stagnant between INR 90,000 crores a month to INR 1 lakh crores a month.
So last 3, 4 months, it's been stagnant there, right? But in the other side, the debit and others is growing massively. Net banking, the debit cards and other usage is growing massively. So that's a trend that you can look overall from even from RBI figures also, right?
So that's where it is there. But for us, it depends if tomorrow credit comes and makes a comeback. And as youngsters and others go more into credit, maybe the credit transactions will also do. From our perspective, we are offering all 200-plus options, credit, debit, net banking, wallets, EMIs, everything. So it depends on the customer we will track overall from a macro perspective, how the payment option changes.
But yes, let's see. But it's something -- this is on a macroeconomic front on how the payment option the consumers are choosing better than on there is a payment progress where we are just enablers of these transactions.
And right now, what is the market share?
In what?
In this payment processing?
There are various ways to look at it. So credit cards, for example, as I told you what is the kind of processing we are doing. You can just compare that with the volumes that RBI gives up, you'll get a idea. We don't give out the entire mix, like how much is debit car, how much credit card and how much net banking. But our credit, like I said, is about 33%, 35% for the last quarter. The rest is debit, so you can just take a look.
There to add to post, but we think that we are in -- I mean, depending upon how you look at it, we only record what is process successfully processed transactions and not necessarily transactions, which have been attempted. And in that, we believe that we'll directly be in the 10% to 15% of the merchant-to -- consumer to merchant side, we should be at least higher or almost there.
Yes. Plus we only count the e-commerce volumes, they don't count the payout. So I think some of the companies also count the payouts as their processing volumes. So that makes it a bit difficult to compare [indiscernible].
Okay. And are you also planning to build platforms just like we did for JioMart. Are we planning for PVR which is part of JioMart and Tataneo where these kind of places there is maximum credit card transaction, especially in travel business.
Yes, we are, like if you've seen hospitality, more than, I think, 3,500 hotels are already using that platform. And with the new challenges of tokenization of cards, nonstorage of credit card, there are property management systems and other. So a lot of innovation and new technology is being built in partnership with some of the biggest chains, hotel chains in the country. That's through the hospitality platform. We're also building platforms on the B2B perspective.
So today, Hindustan Unilever, Bisleri, a lot of guys are using the entire vendor management, along with their credit payments and other things where there is card issuance as well as acceptance. So card issuance platform is something through our subsidiary Go Payments we are building. A lot of CUG debits and credits have gone out to that system.
So a lot of -- as you said, if you see the whole overall company listing solutions, payments and platforms. So it's like a horse and a car both go together and pull it data, it gives us enhanced margin. This gives us a stickiness with the merchant, where new competitors cannot just give 1 part of the solution and try to take because it is tightly integrated bill together between our platforms and payments.
And for the record, we in the hospitality solutions did more than 1 million room nights in a year booking for our hospital departments.
1.4 million room nights, 14 lakh room nights is what we have booked through our hospitality partners, including some of the biggest names.
That is in this quarter?
No, for the full year.
[Operator Instructions] The next question is from the line of Ayushi, an individual analyst.
Congratulations on a great set of numbers. Sir, basically, I wanted to understand the breakup of other income. And because we can see that on a consolidated basis, like other income has reduced from INR 32.76 crores to INR 13.3 crores. So sir, what is the reason behind this decrease? And what are our sources of other income?
Sure. So basically, last quarter, we had talked about this. There's a onetime income last quarter. That was recorded because of the mark-to-market on certain investments that the we have made. And because that was primarily the reason why you saw the income growth last quarter. This quarter, it is interest income that we accrue as well as the slight M2M gain that we recorded this quarter as well on our investment.
Okay. Okay. Sir, the guidance of INR 110 crores to INR 125 crores for FY '23 includes the other income or is it excluding the effect of other income?
Basically, we had given the guidance with the objective that we will attempt to only achieve the targets without the other income. We think that we see visibility on numbers within the 10% range. But again, like I said, Q4 is typically a very strong quarter for us.
So we are tracking it. And we think all across the board, the guidance that we have given for revenues are definitely on the higher end, for EBITDA will be in the higher end of the range. And for PAT, we will see how the performance is in Q4 and come back to you on this.
All right, right. And sir, so the final question, sir, how many ports like the have been installed so fast. And sir, in the management commentary in the beginning you said that we are among the only few to process the EDC transaction. Sir, who else are in the market? And what kind of competition are you seeing here?
Okay. Then get the first question. Can you repeat the first question for the?
Sir, how many ports or next assay terminals or the have distributed? Sir like have you like you tied up with the major merchants to what I can update over this?
Right now, TapPay is mostly focused on the smaller merchants. So we have, in this quarter, what we earlier announced around 50,000 to 1 lakh installations of TapPay done across the market, and it's growing fast. And as I said, it's revolutionary because it takes away that clunky point-of-sale terminal, which calls around 10,000, 12,000. You have any Kirana shop even a deeper village in Manipur or Assam or Odisha can just go to the Play Store and download the app and start accepting payments on his own phone, right? Credit card, debit card payments on the customer scenario.
So all those things perspective is growing very fast, and it just needs a little bit more push and training and other things that we are focusing on. And as we mentioned earlier, we aim to take it up to 1 million of merchants shortly. But even the bigger merchants, a lot of things where we are working with hospitality, a little forward-looking, can't say, but a lot of high-end technology is being coded to make the use cases within the hospitality where they can give in room check-in, checkout instead of going to the counter and checking out to a lot of delivery boys can have their individual this app pay, this thing where they can collect payments when they deliver the goods, instantly through credit, debit and other things. So a lot of other things have been coded and being built.
So it's evolving technology. As per CBDC is concerned, we've built a lot of high-end technology to enable RBI's mission to make this CBDC, the Central Bank Digital Currency, the E-rupee available right now. We've done a proof of concept with 5 or 8 merchants where we did first online CBDC transaction for retail payments in the country.
So we course to do it. A lot of coding effort and a lot of -- since it is totally new in the sense that many aspects of this kind of currency option has not been cut even by the Central Bank. So it's a continuously evolution process. And I think once all those processes and everything other things comes in place, it will really take off.
But right now, it is just in a pilot phase, and we are still working out on a lot of modalities and a lot of use cases and a lot of enabling to make it as strong and as innovative as UPI was for bank debit this kind of system that can differ cash. So it will take some time and effort. But we have built the first and we are still working -- building a lot of new technology and use cases for this also.
It will evolve in the coming quarters, and you will see the growth -- you see the growth we will report it as well as also the press is also very keenly following it.
Okay. Okay, sir. And just to confirm. So sir, if we look at like the app download now. There like a 1 lakh download plus. So although the downloads have a small merchants only, right, there are not any big merchants over there.
So there is a mix of both. Mostly, we are focusing on the smaller merchant where there is an immediate need and this then definitely, there are some middle merchants also, but as you -- as this thing will give out the client names in the coming quarters, when we make bigger use cases than this thing about TapPay and get deeper integration to the bigger names in the market.
The next question is from the line of Rahul Jain from Dolat Capital. Sir, there's a lot of disturbance on the line.
Is is better?
This is slightly better.
Yes. Sorry for that. Just wanted to understand the perspective regarding this payment aggregator issue where we are seeing that the competition is not getting the approval, but we have got the license. So any shift in the market share is something that the we might have observed and how you see the competitive landscape shaping up out here?
Vishwas here. So basically look, we've been a long-term player over 2 decades, growing this entire digital payments systems, right? And we have done it step-by-step, block by block, building compliances, building the next level of security and even more importantly, not being greedy in giving access to the Indian payment systems to merchants, right? And many we have seen -- many we have seen now where because of the laxity of this compliance issues or giving access to merchants to Indian payment systems where today now RBI has told them to clean up the act, right? So today, yes, 4 of our biggest competitors cannot onboard any new merchant as of now, as of today. And yes, it has impacted them, but it also shows to our shareholders that the value that we delivered on building the next level of security and the compliance that we follow are top notch. That's why we are active and we see a lot of -- we display that the record number of new merchants that we onboarded in this quarter. And many of these comes because of the reputation and the goodwill and the strong compliances that we have demonstrated to our -- the Central Bank, RBI as well as all our banking partners and to our merchants that is now paying off.
So Yes, it does affect the market. It does affect many other players where they cannot onboard new merchants. So this -- our long-term strategy of playing a real long-term value is paying off now.
Yes. So of course, I understand the long-term aspect of it, which is very, very relevant. What I was also trying to understand is anything, it's likely from a near-term advantage perspective, also if we are able to onboard some relevant scalable merchant in the interim, which could give us the advantage of taking away market share in the near term?
So if you have seen, we have been constantly doubling our TPV over the years. So we are not dependent on this opportunity, but on a long-term goodwill and other things that is there, right? Merchants do trust us and a lot of -- definitely the current nonboarding of any new merchants by the 4 top other PGs is definitely helping the case, but we don't look at it that way as an opportunity. We stand by our feet and I think 22 years is good enough time to develop a reputation and this thing where people and merchants who do trust us because this is ultimately money and finance that we are handling. And it's a record of 22 years, when there is every day, single day, thousands of crores are paid out by us, not a single penalty by any car company or RBI on anything.
So that value system somewhere there is a premium and there is a credit given by many these things. So that's paying off, and we'll continue to grow that reputation and quality and technology and compliance that you all have been known for.
In the short term, you may see it -- this is Vishal. You'll see, if you look at the daily merchant addition averages, we -- in Q2, we were averaging about 7,000, 8,000 merchants, we've gone to 11,700 from there on a daily average basis. So the number of merchants we're signing up for us have significantly increased. And that is a small short-term blip that you will see because of this certain events and perspectives.
Right, right. Fair enough. Just last 1 clarification. I'm sorry if this has been a repeat question. Regarding the GeM, what we saw is one of your consortium partners have seen revenue impact because of the repricing on the volume-led basis. Is that already factored in our revenues also? Or it's yet to happen?
It's factored in. So absolutely.
The next question is from the line of Anil Nahata, an individual investor.
The first question I have is that Vishal can give an update on the first initiative that we had on 2 or 3 quarters now.
Sure. So the platform was launched for merchants to avail loans from banks and NBFCs. The had 2 different ideas actually growing that same workup. Basically, the whole idea was a tech platform where we earn as a tech platform and there's a spread between give and take. So it's similar to what a DC or a super aggregated DSA, looks like from a revenue model perspective for us.
And the 2 opportunities that we were wanting to build up on is our own merchant base. And then working with a very large marketplace, significantly large marketplace because finally, the marketplace has a lot more data and information about how to utilize the framework so that when products and services are being offered that there could be factoring, there could be certain kinds of loans that can be provided to merchants.
So we are actively working on building up the pilot for very large merchant to be able to utilize trust avenue. So while we have launched it, I think the larger needle mover for us would be to be able to give out because this is a technology framework. And when you provide a tech framework maybe one of the top 5 market business in the country that potentially will become a very interesting opportunity for us because automatically, it gets to scale.
And that is the one that we'll be working on and we'll be talking about that maybe in coming quarters.
Sir, can you give some sort of time frame that you are looking towards the integration and sometimes...
It will be in the first quarter to second quarter of next year. So there is a time frame when you can expect to hear from us about trust revenue more.
And secondly, about the tie-up with the bank size, the loan disbursement side?
Yes. So it is direct size, and there are many aggregations as well. And there's a lot of value chain that is associated with that. So generally speaking, when take -- when the volume is significantly larger than the economic of that change significantly as well. And so I think it's a combination thereof.
You must have seen some of the loan disbursements of other fintech companies and how they have worked out. We have taken an appropriately conservative view in terms of how to enable such activities. If you look at factoring, of course, the spread is not as large as unsecured loans.
And I think fintechs and banks and financial institutions, they are somewhat getting acclimatized as well as not being shy about giving such loans based on data. So success rates across the board will do. And I think given that a large marketplace can utilize it, it becomes a very interesting opportunity for us to be able to act as a technology partner in this. We made it very clear, we are not putting up a balance sheet on this.
And we will continue working like a TSP which is a technology solution provider.
Basically. Second question is to response in terms of CapEx, while I heard that you are serving some.
Sir, there's a lot of disturbance in your line.
I'm sorry about that. The question to Vishwas is that right that pay on the last quarter I had a question as well. The key question that comes to my mind is what is the factor inhibiting the rapid scale up of this? I mean is it something that is the technological limitation is the market learning the issue or what? I can suppose if I want to take TapPay tomorrow, can I go and take it for my business?
Yes, of course, you can. So we are live in that prospect. So you can download the app and start even do online registration and start accepting premiums. So that is live. And I think we have reached almost 100,000 merchants now who's doing that. The thing is any introduction of any new kind of acceptance mechanism, right, for that, it takes a little time to push out. The word of mouth has still not started, right?
The moment it takes up and moment when they see the convenience, the use cases and other things, then it will take off like anything. So right now, we are just working on a lot of different use cases. Like I've given an example like if it's a restaurant and they have 12 delivery boys. So they can't have 12 point-of-sale terminals in their hands, right? But within 1 in account of the restaurant, can we have 12 user management, right, which each delivery boy mobile number. So whenever they correct the payment, the main account gets to a notification that this payment has been collected and all that stuff. So all that still it's a continuous development and a lot of other things that is there.
But rest assured, you all can see the benefits at INR 12,000 clunky point-of-sale terminal with battery issues and supplying printer roles to, say, a Tier 4 city or town, deep insider village, deep inside state like Manipur or Odisha is much easier to just download the app and do everything on, on the phone of your existing phones, right?
So those things are there many use cases there. You will see the proliferation. It's just a matter of time. The world has already recognized that contactless payments, the TapPay is the future where all these existing terminals will be eliminated in the next 2 or 3 years. So we have the right plan. We are the only ones which are certified with pin on glass where transactions -- any traction any transition about INR 5,000, you can enter your pin on the phone of the merchant. So that certification is exclusively with us for in Asia actually and pin on glass higher up bigger amounts of more than 5,000 is only with us right.
So all those things are there. It's a matter of time until it fully goes out. You will see a lot of deployments that we are having an integrated solution where we put not only the TapPay also our QR code along with our marketing efforts now. With the coming few quarters, you will see a lot of traction and changes coming there. And as usual, we'll be leading the whole effort of this contactless payment in the market.
So basically, we can think about seeing some meaningful revenues coming on to this from quarter 2 onwards FY '24?
I think some of the revenues have already started. It's a merge ultimately at the back can is still the revenue payment gateway than just a form factor, the TapPay is just a form factor. So you'll also see the CCAvenue payment gateway. It's an omnichannel payment gateway. That means that you can use TapPay for your offline in the -- so customer present scenario. You can use it for your own company app, if you have to collect payments in that, you can send out WhatsApp payments, link other things that is there. You can use it on your website along with your existing shopping card and all those transactions are all reflected into one CCAvenue payment gateway. So this is just another form factor that we have added to specifically cater to this off-line and other merchants whom we were not catering all these years because we never believed in the point-of-sale terminal business because that's a very expensive, difficult and not revolutionary. This is something which is different and can disrupt the whole thing.
Absolutely, Anil. That's why I think a lot of participants have the question on TapPay because this is really a disruptive thing. So if I can just ask you a question that while I know it is all ultimately aggregating into the payment gateway business. What kind of transactions you are seeing on this as we cross the lakh transactions per day, some sort of order of magnitude. I mean that will give us an idea.
As I said, it is a merge transaction. I cannot be divest right now. So overall, on the transaction volume, all these transactions also reported. We are not segregating because as we said, through the phone app, the CCAvenue app, which has TapPay, you can send the payment link also and the transaction will come in. And in that app, other also there. So that intricate level of detailed reporting that these transactions there for a particular merchant came via a tack-on phone or on their website or in the app, or to a payment link or through app, those details, I think it's distinct in detailing to disclose. On the overall volume, it is reflected.
Okay. And the final question, GeM, if I heard a previous participant asking the question that there has been some repricing on volume basis. Can we take a sort of idea of what kind of repricing has happened and since when this has been applicable?
If you're referring to GeM repricing, is that the question?
Yes.
Yes. So fundamentally, what it means is that beyond a certain threshold of volume, on a particular order that there is a capping. So in other words, a certain kind of -- at a certain threshold of value that because if you remember, in recollect, we had a variable fee. And so in other words, if there are multiple orders for a single setup that you have done, then it continues exactly the same way.
But for a very large order, there is a capping that government has introduced. And that is the repricing that we talk about. And the second is the G2G order, government-to-government order. So if there is any government-to-government order, then there is repricing on that. So those are primarily -- I think if I had to summarize the 2 impacts that you would see. There is also a slight change in terms of -- if you recollect that beyond a certain volume that the bits for the consortium goes down.
So there's been a marginal change in that. But the 2 major changes are set and that has been factored in, in all of our revenues.
And this has been applicable since like which quarter?
This has been applicable since last 2 quarters.
Ladies and gentlemen, due to time constraints, that was the last question. I now hand the conference over to the management for their closing comments.
Thank you all for joining our Q3 investor call, and we look forward to keeping in touch with you. So thanks again.
Thank you. Ladies and gentlemen, on behalf of Go India Advisors, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.