PayU expects 5% profitability margin in near term as new revenue lines kick in

Digital payments major PayU is looking to reach an operating profitability margin of 5% in the near term, compared to a 2% operating loss it reported in the financial year 2025, according to its chief executive officer, Anirban Mukherjee.

Addressing Capital Markets Day 2025, for Prosus, the Netherlands-based parent entity of PayU, Mukherjee said that the company managed to break even in the second half of the last fiscal.

Overall, PayU posted a revenue of $498 million from the core payments business, as reported by Prosus in its FY25 annual report.


Speaking on the Unified Payments Interface (UPI), the popular retail digital payment mode in India, being offered for free, Mukherjee said that in the long term, once revenue generation becomes possible on UPI, it will definitely boost the earnings of the company.

He added that since the company has no control over the decision on merchant discount rate (MDR), it is not baking that potential revenue line into its future financial calculations. Earlier this month, the Indian finance ministry said that it has no plans to generate revenues from UPI payments in the near term, as it is prioritising the adoption of digital payments by small merchants.

MDR is the price paid by merchants to their banks for supporting digital payment settlements.

Also Read: Centre's no MDR stance derails fintech's UPI monetisation plans

“I think (in the) near term we will be in the 5% range soon enough, and from there I expect it to expand, and that is just the core payments,” Mukherjee said.

Further, with value-added services and the software services revenue lines kicking in, he said that he is expecting a few additional percentage points to that. PayU acquired a 43% stake in Mindgate recently, which gives it access to UPI payment processing for many banks. PayU also owns Wibmo, one of the largest card processing entities in the country.

“And hopefully with scale it keeps compounding for a very, very long time, and with that we will see much more profitability,” he added.

Further, Mukherjee said that PayU has grown its total payment value to $80 billion in FY25 compared to $19 billion in FY19. The company is also looking to reduce its cost per transaction in a bid to improve financial efficiency. Its current cost per transaction has come down to Rs 1.8 compared to Rs 2.6 in FY22.

Mukherjee said that he expects that with increased use of GenAI in marketing, customer onboarding, and other similar business functions, he will manage to reduce the cost per transaction and improve the profitability of the business.