One97 communication Ltd (NSE: PAYTM) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Madhur Deora — President and Group Chief Financial Officer
Analysts:
Manish Adukia — Analyst
Sachin Salgaonkar — Analyst
Pranav Gundlapalle — Analyst
Sachin Dixit — Analyst
Jayant Kharote — Analyst
Piran Engineer — Analyst
Vijit Jain — Analyst
Pranav Kshatriya — Analyst
Rahul Jain — Analyst
Parameswaran Subramanian — Analyst
Jigar Valia — Analyst
Presentation:
operator
Thank you and welcome to paytm’s earnings call to discuss our financial results for the quarter ending 12-31-2025. We will start our call with Q and A after introduction to the management from PTM’s management. We have with us Mr. Vijay Shikhar Sharma, Founder and CEO Mr. Madhur Deoda, President and Group CFO and Mr. Anuj Mittal, SVP Investor Relations. A few standard announcements before we begin. The information to be presented and discussed here should not be recorded, reproduced or distributed in any manner. Some statements made today may be forward looking in nature. Actual events may differ materially from those anticipated in such forward looking statements.
Finally, this earnings call is scheduled for 45 minutes. A replay of this earnings call and transcript will be made available on the company’s website subsequently. Over to you.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Hi, good morning everyone. It is really lovely to see each of you logged in so early hours. It was a very tough decision for us to take a decision whether we want to do it so early before market yesterday night or tomorrow. And I think the elephant in the room pidf we sort of were making sure that you get to read it much before the market opens. So we tried deciding it at an early hour for other side of the world people who logged in in this. Thank you for logging in in early hours of India.
And as you see it’s been a year plus since we had decided that we’ll head down and execute on our core business principle, core business which is payment and financial services. And we continue to dominate the merchant ecosystem. We continue to and we now have started to build on consumer and like I had promised earlier that we won’t throw money on consumers rather we will throw technology and product on consumer. And I mean for many reasons our numbers are what numbers are like not in the reference of the market share I’m quoting here but at the same point in time the capability of our product and technology team can be evidently seen that we are growing outgrowing the competition or the market out there in the game.
So this kind of attention will bring our consumer market share forward. I’ll take reference of Prime Minister’s make in India initiative. It used to be thought that one point in time that make in India, manufacturing in India, how will it happen? And as we can see, honorable Prime Minister’s initiative today is like pride of India that we see so much of manufacturing in India. That’s exactly how I would look at UPI consumer business. For us it may be like oh my God, you’re fighting somebody so large market share But I think it’s a great product that will win the market, not the dominance of certain regions that has happened.
So with that attitude and put opening that we believe that consumer is our market to win and merchant is our market which we are winning. Here we are and I look to answer the questions and we also have started detailing lots of data. As you are aware, while we do see that revenue and profit momentum is growing, you have to remember that the business is still in early phase, very early phase. The customer acquisition is still the game in the market and then monetization is the primary game that long term becomes. So with the commitment to build a long term free cash generating machine inside our payment and financial services business and expanding that to next time.
Here we are. Good morning.
operator
Thank you Vijay. We will start our Q and A now. If you seek to ask a question, kindly utilize the raise hand feature on your Zoom dashboard. Please ensure that your name is visible as your last name followed by your company name for us to be able to identify you. We will unmute your line and take questions in the respective sequence of the raised hands.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Yeah, and I think as you’re seeing that we’re doing a video call and any one of you who wants to switch on video or not, that’s welcome. I understand it’s early so we may have more studio this time. Thank you. And we’ll continue the standby just in case.
operator
We will take the first question from Mr. Manish Adukya from Goldman Sachs followed by Sachin Salvankar from Bank of America. You may go ahead.
Manish Adukia — Analyst
Hi. Sorry, I was just trying to join again. Vijay Madhur, good morning. Great to see you. Thank you so much for doing the call. Just the first question is on Vijay, what you mentioned in the opening remarks, the pidf. So couple of like sub questions there. One in the shareholder letter you talk about the fact that you should be able to meaningfully offset the impact over a period of time. But at the same time you also talk about contribution margin going from like 57% now to mid-50s as a result of the PIDF impact. I’m just trying to reconcile the two statements that if you’re able to offset the impact then why should there be a contribution margin impact at all.
And second, if you can just talk about also the offsets and how long could it come or could it take for the offsets to come? That’s my first question.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
First and foremost I would tackle talk about what the IDF core was built. I mean we all as industry loved it when it has been done because the extension of payment to the hinterland of India was tougher, especially when you were adding a subscription or a costly device to the element. And that is when the payment infrastructure development fund was generated and created and the sound box were added to this element. Typically it existed ever since it had POS devices, the card devices. And I’m very happy to tell you that we’re talking 2026 now. Everywhere in the country the use case of mobile payment is evident and clear.
Even if a shopkeeper is out there, that person will take care and pay for the subscription. The value prop has been acknowledged. The keyword is value prop has been acknowledged. Does the industry need pidr? Well, as an industry we are welcoming every initiative that government or any other entity is looking to console. Give us at the same point, our business model is not based on this. That’s a keyword. We are not sitting here to take grants. We are not sitting here to take grants as our profit and revenue. That’s it. Now that means that we will offset.
Yeah, it just give us the opportunity to go into the line item of businesses which were. Oh my God. So. So. Well, without PIDF initiative our revenue comes from the merchants pay subscription and merchants who take credit. And PIDF surprisingly was not credit worthy merchant if you will. So it was very. It was, as you can see we were deploying where we were ready to deploy and we were getting the revenue from certain set of merchants that we were able to convert them into credit worthy merchants. So if you see we were not the top deployer while we were the top merchant player in the industry.
And it was because we never looked at it as a revenue line item. We rather looked at it as, let’s look at it extending the reach towards tier 3, tier 4, tier 5, tier 6 and the places where we would have not reached. Our model is perfect now, I’m very happy to say. We now are ready to tell you that we will offset it from number one, the subscription that we earn from them. So there is subscription that we earn from them cross sell of financial services that we will do and do on them. And that’s perfect.
And that is why we believe that we will not require PIDF in our business model. At least not in our business model. We are not in device deployment rental device as a business model, CapEx as a revenue model. We are strictly about payment and financial services and that exists Sacro cent and expand. So now why are you talking about mid-50s? Well, I’m just trying to be that we have always been conservative on the numbers and we always out we we believe that it is rather better to say and then beat it in upper.
Madhur Deora — President and Group Chief Financial Officer
Box and I’ll just answer a couple of other things Manish. So my expectation is that obviously the work started immediately and we were ready to recalibrate what we have said. Higher subscription revenues and more targeted sales efforts. Our expectation is at least 30, 40% of this will offset this quarter and more over time. The work like I said it started immediately. And the great thing about behind the scenes what Vijay is saying and we have talked about this a little bit previously is that a lot of a huge amount of our sales planning now is AI based and it is extremely intelligent.
Right. So for us to recalibrate certain efforts and measure payback periods is much more advanced than it was maybe a year and a half or two years ago. So these kinds of projects I think we can handle in a very disciplined manner. YCM down that is we have put that out as the worst case situation. There’s also a bit of a mechanical sort of reporting issue here which is that if it is, if the impact is offset by higher subscription revenue then the CM will be fine. It’ll be the same as before. If it is more because of more targeted sales efforts then CM may go down but people cost might go down as well.
So at an EBITDA level we have said significantly offset but at the present time we don’t know exactly how much of that offset would come from higher subscription revenue versus more targeted sales effort and that may or may not have an impact on cf.
Manish Adukia — Analyst
Very clear. Thank you for that. My second set of question was just on launch of products. So one I know in the shareholder you mentioned a line about strong traction of the buy now pay later product. But again just where are you in your journey? I think last time around it used to account for more than half of your dispersals before you had pull that product back. So where are you on your journey to get there? And also if you can maybe remind me where we are on wallet potential relaunch if it’s likely to happen sometime this year.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
So yesterday we were discussing should we start disclosing credit disbursement numbers the number of crores that you disburse in consumer or business or merchant. One thing that because you read it so nuancingly you would notice that we have added binary operator as a part of our consumer credit plan and that means that we believe this is a foundational plan and happy to tell you that we are crossing hundreds of crores of monthly Disbursement on this literally in the less than six months of launch and we are talking about six digit customers who are using it.
But I think I’ve learned only one thing, that incoming matrices are useful with very clear modeling that you can say so number of customer, if you notice of financial services will increase and the average value per customer will increase which is what you will continue to see over the period. So that is where the numbers are. And wallet wise, as a promise, I would rather say as a promise we will bring the wallet back home.
Madhur Deora — President and Group Chief Financial Officer
We just want to clarify the numbers that Vijay mentioned. It’s been three months since launch, we have crossed 1 lakh customers and within six months of launch we expect to cross 100 crores of dispersal. So that’s the kind of early trajectory. Of course it’s much faster than the first time we had launched postpaid. So we’re quite pleased with that. And on wallet, like we just said, we are going to bring the wallet back. We do think that just to manage expectations because in conference meetings and so on we get a lot of questions on this.
We had talked about wallet profitability being 500 crores when in January 24th. We don’t think the product is that big in the industry going forward. Right. So we want to bring it for consumer completeness because the consumer should have an option. We’re big believers that consumers should have options, as many options as we can come up with. So postmate is an option, wallet is an option. But one shouldn’t think of wallet as being as sticky, as relevant, as important today as it was three years ago.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
And Manish, just in case postpaid customers are payment customers so they are not added in FS customers.
Manish Adukia — Analyst
Thank you for clarifying. Just last question maybe for Madhur. So I think early on when the RBI impact had come through and you just started recovering from that, at one point you had called out what you believe is the likely growth scenario for the business which I think you said more than 30% revenue growth back then with 15, 20% EBITDA margin over a period of time. We are now maybe four to six quarters past that. Now if you were to just re look at the business today from current levels in 2026, if you were to take a two to three year view, what do you think is the realistic revenue growth that the business can deliver and where do you think the margins can get toward a two to three year period? That’s my last question.
Madhur Deora — President and Group Chief Financial Officer
I think that outlook is more or less intact. I think we are as Excited about the opportunity in India today as we were two or three years ago. The more we do, the more opportunities we find. So we think on devices growth with or without PIDF that business is robust. There have been positive surprises for example beyond UPI which has solidified our payments processing margin and made the payments business more viable for us, especially on the merchant side. A merchant loan business does fantastic. We have also mentioned that we did 25% growth on a like for like basis which you can take it for what is worth.
Obviously the reported number is 20% but it was important for us to put that out there especially as we’re doing planning for next year and this is a year in which certain businesses did not quite do on our expectations. So consumer credit cycle continued for a bit longer than we thought which affected personal loans and credit card. We have been quite transparent about the fact that the marketing services we were it’s been flattish over the last three four quarters. There’s more work to do. So as we get some of those things going. PAYTM Money is also showing good signs as we get all of those things going.
I’m very positive that we should be able to accelerate growth and the EBITDA margin outlook is intact and we are actually heading towards that quarter on quarter. As you can see we have a ton of operating leverage.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
I think I’ll also add one last line that we have more more sure than ever because of focus on the core business model that we’ve added earlier. We were not sure of whether it is scalable business model or not. So that is why there were few more line items and those line items have been pruned. So I’m going to say that well this is the core of course.
Manish Adukia — Analyst
Thanks a lot. Thank you for taking my questions. Have a great day.
operator
Thanks Manish. We will take the next question from Sachin Sal Gankar followed by Pranav Gundapale from Bernstein.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Thank you. Thank you Sachin for switching on the videos guys. I really appreciate it and I’m not putting a pressure on others who don’t or may not but thank you.
Sachin Salgaonkar — Analyst
Thanks Ajay. Morning all. I have three questions. First is just following up on the incremental levers for growth and one way to think about it is clearly there is a lot of confidence in the merchant lending soundbox UPI in terms of what you guys have achieved. Your shareholder letter did mention that you have now all three payment licenses. So on the back of it should we expect acceleration of merchant and consumer onboarding and as a follow up to one of the earlier questions is today at inflection point where going ahead we should continue to see that growth and also on those lines equity brokering.
Are we again at that point where we could see more disclosures from you guys as this business scales up?
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Yeah, yeah. So. So upside is very clear. Get more more merchants. And thanks to the focus that I’ve said there is a huge amount of upside left in online merchants that I want to tell you that we’ve started doing it. You may have noticed that I become the CEO of the PTSL company. So online business will start generating more upside in payments and financial services. In fact I want to put it on the table that online business has margin because of platform fees and many other EMI etc initiatives and card etc initiatives that we do with mer of more monetization on payments.
So number one I think we have literally added a new line animal business which will be materially sizable because that business since 2021 was paused practically. I mean it’s an important thing to note that payment business will get boot because of permission and the structure that we are doing. So we are recruiting in that you will see more recruitment of sales executives for our enterprise sales. And we are because we are champion in offline. We were championing online. Now we can acquire both in the same entity. It will become omnichannel product. So number one, number two is that you know that our device led offline merchant business is phenomenally better than anybody else.
Now that everybody’s numbers are out in the market I can flawlessly say that every replica of our business model is a proof of our business model and acknowledgment. And we’ve done it better than anybody else that is shown there. So now we have double the confidence of dominating more number of merchants and more cross sell of financial. So that is the core business remains. Like you very well pointed out. There is an upside in buy now pay and postpaid and inflection point. I think I’ll wait for till the time period let’s say six month happen all because of that.
I want to make it sizable and then I want to. We want to move towards credit business which is led by that because there is a nuance of led by payment and adding to the payment in this. And we are now we don’t think that okay, let’s just do this business. For example like we used to distribute credit cards and we just stopped that business because I was like it does not add to anything just because you have a traffic. You can try Doing it is a, not a business model. Let’s say that what, what do you do which grows your moat and protects the moat and expands the mode instead of just because you are.
And that is how the optimization of cost also has been happening, if you notice, I mean unstated state statement is that every quarter our cost optimization is continuing. And there was a question I remember a couple of quarters back, how long will it continue? I was like this is a continuous thing. I’m further pruning, further pruning, optimizing for what is called core mode, expanding this, protecting it and monetizing it. So yes, buy now, pay later is one mode and PAYTM Money. Let me say this, I mean when we launched PAYTM Money, it was the top SIP producer in the country.
We got defocused, we went through ipo, we went through many other processes and we want to make paytm any top five player in less than next three years. And let’s see what ranking it hits that. So it’ll be material. Yes, you’ve seen the mtf. We started to play offense by putting MTF benchmark in the market. And this is because we have book, we have capability, we can do it. And so these two line items, so you can say buy now, pay later, you can say PAYTM Money, we have certain other wealth products, they’ve done phenomenally well and expanding this year we will also expand more kind of merchant credit because we are now getting online merchants, large type of merchants.
So I mean what previous question that Madhur was answering few minutes back that we are more sure than ever of higher growth and higher margin. And I think like I’ve said it, we don’t want to focus on any vanity metrics whatsoever. We’ve reduced them all to focus only on how our revenue growth and bottom line growth and free cash growth goes on. That’s it.
Madhur Deora — President and Group Chief Financial Officer
And PAYTM Money, just to finish as a search in Aussie, as a legal entity, they do disclose financials and there’s a whole bunch of industry information available on annual transacting users and so on. I think my sense is that we’ll start sort of sharing more information as if it becomes sort of high single digits type of revenue for us overall. Currently it’s sort of in the low to mid single digits. So just wait, maybe a few more quarters.
Sachin Salgaonkar — Analyst
Thanks guys. My second question is we did see increase in promotional expense this quarter. The question out here is should we continue to see spends increasing out here and if so, will it be more towards a consumer retention or towards a Market share gain.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Market share again.
Madhur Deora — President and Group Chief Financial Officer
I should just add that I think consumer retention, market share gain, we see that as completely overlapping because the focus is on high quality users and building retention which then gives us market share. So it is not about, let’s go in a, you know, double the, that is not the focus, the focus because you could dilute quality on the platform dramatically and that affects your ROI and retention rates and so on. So yes like we just said it’s market share gain but it’s driven by making sure we have high quality users, high quality of engagement and that being the path to market share gains.
Sachin Salgaonkar — Analyst
And should we expect the three Q numbers to be the new normal or there’s room to further increase from these levels as well?
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Increase what?
Sachin Salgaonkar — Analyst
Cost or the promotional expense? The promotional expense.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
All right, all right, all right. No, no, no, no. I, I, I’ve said it, I rather build a product LED technology led product instead of marketing or marketing spend that product. So we were bare minimum and we had told about it in a previous quarter if you remember that, that we would do it calibrated. So I think this could be more norm less.
Sachin Salgaonkar — Analyst
The third question is on PIDF and thanks for clarifying the impact on contribution margin but from a very near term point of view wanted to understand the impact on EBITDA also in the sense a slightly lower contribution margin. Should it trickle down and have an impact on EBITDA or because you guys are controlling your indirect cost there should not be too much of an impact on EBITDA even in the near term before any offsetting impact comes let’s just.
Madhur Deora — President and Group Chief Financial Officer
Park contribution margin as a walk from PIDF revenue to ebitda. What we have said is we should be able to significantly offset this. And in response to Manish question I said this quarter alone we should be able to offset at least 30 40% of it. So last quarter this number was 80 some crores. We should be able to offset 30, 40% of it. But the remaining impact while at 60% will it be down to EBITDA? So yes, in the very short term we will take an EBITDA in back in Q4 but over time we’ll be able to recover more, offset more of this.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Yeah Sachin, these merchants actually now that our cross sell monetization machine is better than ever before and we’ve been focused on monetizable merchants so we here also focus on those so the monetization from these merchants will start trickling in. So it was more like a little bit of subventioning of Capex, if you will. But now if you’re talking about this, monetization is absolutely the way ahead for us. We did not try acquiring everybody on the zones. We rather acquired the good quality, good people whom we thought that we could give, extend credit, distribution or any other product.
Sachin Salgaonkar — Analyst
Got it. And last question, wanted a clarification or more details on that. Your shareholder letter mentioned you have adopted a more conservative revenue recognition policy in the past few quarters. Can you elaborate on that?
Madhur Deora — President and Group Chief Financial Officer
Yeah, so there’s been a few different things, but I think the one example I can perhaps give is that a merchant who has taken a device from us, when they become inactive in a certain month, a large percentage of them do get reactivated. So we had a certain policy with respect to what percentage of it.
Sachin Salgaonkar — Analyst
For.
Madhur Deora — President and Group Chief Financial Officer
How long we would recognize revenue for an inactive merchant. And of course if they’re inactive after a certain period of time, we would take that base and stop recognizing revenue. We have tightened that as a result of that policy. We would get some provisional for doubtful debt.
Sachin Salgaonkar — Analyst
Right.
Madhur Deora — President and Group Chief Financial Officer
Because some of that revenue you’re not able to collect. So what we did was we said we’re going to be much tighter about merchant if they’ve been inactive for more than 30 days, will stop recognizing revenue from them, which like you have seen, has a huge impact on pdd. So at the EBITDA level it is neutral. We think it’s much cleaner reporting, it’s much more transparent reporting. So that’s, that’s the largest example of what we’re doing.
Sachin Salgaonkar — Analyst
Thank you and all the best.
operator
Thanks.
Madhur Deora — President and Group Chief Financial Officer
Thank you so much.
operator
Thanks. Sachin. We will take the next question from Pranav Gunlapalli followed by Sachin Dixit from JM Financial.
Madhur Deora — President and Group Chief Financial Officer
And we just request, we just request people to limit themselves to two or three questions without too many sub questions either, if you don’t mind.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
No, I think this Quora has some things which people want to know. Of course.
Pranav Gundlapalle — Analyst
And I think we are really making us available so they’re feeling more comfortable. I’m okay. We can extend the call. Yeah, thank you. Thank you. Good morning. Hey, morning. Morning. Jay P. Just a couple of questions. So one is could you just shed some light on, I know we talked about cost in the early questions. What are the MO parts there? We’ve seen almost a flat cost line for almost about four or five quarters. So one, what’s really happening in the background and second is if it doesn’t go up, when do we start getting worried about underinvestment? So that’s the first question.
And the second one is more on the registered merchants. You do share that number. Would you be able to share some color on how many of them are active and how is that growth playing out? Because the registered merchants are growing at about 12% whereas your devices obviously are growing a lot faster. So in between where you have the active merchants, how is that number shaping up? Those would be the first question on investment is rather we are sometime mother would say are you sure you want to over invest like this? Because you want to keep a discipline eye on it and which is very good.
And I can say that the lovely thing that you saw is that consumer investment, we started doing it. I mean this is because we believe that we have a monetization capability. I mean the pro, the puzzle in the consumer is how will you monetize? Advertising is not monetization. You have a traffic, everybody got traffic. How can traffic be justified on anything else? So I’m happy to say that we have, once we learn how to monetize, we are expanding and that is how our business is. And in the merchant side you keep seeing, actually one of the discussion Madhu was doing in my monthly business review was that our sales people cost is like rocketing.
I mean if you see your own year or anything. And I said madhur, let’s just double down on that. I mean why would we not? And then we discussed that how can we AI optimize that line item, by the way, I mean this is, I want to tell you very flatteringly to the team that is doing this job, it is extraordinary confidence of per dollar incremental investment, how much of bottom line we’ll get. I mean it is more than ever and it will become juicier than ever further ahead. So there is investment, surprisingly. And the good thing is that I’m removing the deadboard continuously.
That project will continue. So there you see reallocation happening within the cost. It is not that we are not investing in future, we are rather investing in the future and removing what we don’t want to carry forward. That’s what it is.
Madhur Deora — President and Group Chief Financial Officer
I should just maybe add a couple of things on marketing and sales. Our mindset is we should invest as much as possible. That we can do with high discipline.
Pranav Gundlapalle — Analyst
Right.
Madhur Deora — President and Group Chief Financial Officer
So you would see that our sales employee cost this quarter is actually all time high. So we’re not under investing. We do think in parallel we’re constantly working like Vijay is saying on productivity. So for example, we took our, we reduced our marketing expense a lot because Vijay was not convinced that it is as Productive as it can be that is it’s not as product led. So we took a pause there for a few quarters and said we’ll fix the product first and then we’re going to spend more on marketing, on sales. We’re doing it in parallel.
So we’re perfectly happy to invest more in sales even next quarter. But we’re going to do it productively. But productively subject to PIDF targeted sales efforts etc. That we have set on other things which are not marketing. Non sales AI has helped tremendously. There are certain places where we have had better commercial negotiations. Given that’s an. Ongoing exercise and of course that other indirect expenses we have called out is positively impacted due to pad. So we feel actually very happy with the cost structure we have that we are not under investing. We are doing it the right way and we’re focusing on productivity on registered merchants. Just to clarify Pranav, we have a number of registered merchants which have disclosed back of the document which is 4.8 crores. Ignore that completely. We don’t. We never talk about that in the front of the document. That is a sepia obligation that we carry. So that’s there. So I’m just telling you that that’s not the number that we use for our operations. We do talk about subscription merchants. These are merchants that actually have a device from us.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Right.
Pranav Gundlapalle — Analyst
That is 1.44 crores. We see that as the proxy for our top of the funnel. I don’t think we are going to start adding more KPIs off top of the funnel KPI just because others are doing it and so on. Because our focus is that’s the deployed base that’s focused on revenue and profitability.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Right.
Madhur Deora — President and Group Chief Financial Officer
And not adjusted revenue and profitability if I may add. So and we’re just sort of going to track that going forward.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Just one follow up there. What percent of your GMB would be coming through these device merchants of your entire state engine? I think, I think significant more than majority. I mean the QR merchants are practically nearly. I mean my sales team does not even require QR merchants in the off internal funnel for device deployment is churn the other other competition’s device. It is not qr. We used to do it and we used to deploy QR and upgrade them to Soundbox. Now we’re like okay the bad devices out there, let’s turn them in to.
Pranav Gundlapalle — Analyst
Us in the offline world. Vast, vast majority. Obviously there’s online GMV as well. There’s PAYTM app GMV as well but in the offline world, vast, vast majority comes from sound boxes and car machines.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Okay, would it be fair to say like maybe 75, 80% of your offline GMV come from merchants who have devices installed? Actually nearly all.
Pranav Gundlapalle — Analyst
QR only merchants are negligible.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Negligible. So that’s why we started to index only on the merchant whom we can charge the money. Look Pranav, it’s easy to give any KPI whatsoever. For example like I can deploy a device and if it is for free, well you can say whatever about it. I mean monetizable capable merchant. And that’s why we call it subscription. If you notice we don’t call it the device merchant deployed device, blah blah blah blah. It’s the only material number that we showcase and I’m sure you led us to that. Yes, perfect. That helps a lot. Thanks a lot.
Thanks a lot guys.
Pranav Gundlapalle — Analyst
Thank you.
operator
Thanks Pranav. We will take the next question from Sachin Dixit from JM Financial followed by Jayant from Access Capital.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Good morning Vijay and mother.
Sachin Dixit — Analyst
Thanks for the early earnings call so quickly on the payment business. Right. So you have highlighted in your letter that there was a 4 basis points plus payment processing margin in this quarter. If we can probably break down some color on this and if there is any guidance on because this used to be three to four basis points earlier. If there is more trending upwards of this 4 basis points margin.
Madhur Deora — President and Group Chief Financial Officer
Exceeding that consistently some of the instrument mix is helping. Last quarter there was a lot of question whether this was CMI driven. No, this is. That’s obviously a part of it. Or festive driven. That’s always a part of it but it is not the major driver. We’re not guiding to higher numbers right now. We want to see just market discipline continue and the trend of things like rupee on UPI etc continue and positive mix. But we feel pretty confident that it’ll stay above 4 basis points for the next few quarters.
Sachin Dixit — Analyst
Understood. On the marketing services side obviously we. Have seen some bottom out happening. The numbers have improved on a QQ basis slightly on this. We are also investing on our own marketing expense on consumer retention, trying to focus more on the app side. Do you have any visibility there? If we can see a slightly improved growth trajectory going ahead or the business still continues to be in a wait and watch mode. I think we will continue to see growth in this business but it is fair to say that underlying and this is four or five different things together which are sort of exposed to market condition. Right. So we did have a very, very small business and advertising for real money. Gaming, which went away in Q2, it was less. It was about 1% of our total revenue. So much, much smaller than other numbers that you may have heard. So that was sort of a headwind. Obviously travel business has had a few hiccups, you know, most of last year. So there are few market conditions type of things that do affect this business. But we are, we did see bottoming out last quarter and we could see that it has bottomed out which is why we called it out in the last quarter and we do think that this business should continue to grow from here.
Sachin Dixit — Analyst
Got it. One last question. If I can squeeze in one of your listed peers talked about watching out for MDR on organized merchants in the budget. Do you have any views on that? If there is any UPI MDR sort of potential appearing to you, it’s two days away.
Madhur Deora — President and Group Chief Financial Officer
So let’s just wait.
Sachin Dixit — Analyst
No, sure. All right. Thank you and all the best.
Madhur Deora — President and Group Chief Financial Officer
Thank you so much.
operator
Thanks Ashen. We will take next question from Jayant followed by run engineer from clsa.
Jayant Kharote — Analyst
Thanks Anandita. Hi Madhur. Hi Vijay. Thanks for the opportunity. So the first one is on payments. So I presume the net payment margins are holding very strong at 4 plus for the next foreseeable future. So that is leading to an implied device yield of 60 rupees if I’m not X of PIDF. So so now if, if Madhu, you’re saying you can recoup 30, 40%, do we assume this 60 moves to 65 immediately in this quarter or you, you’re talking about sales efforts plus cost efforts leading to that 30% off. Yeah.
Madhur Deora — President and Group Chief Financial Officer
So Jen, it’s hard to sort of boil it down to only subscription revenue because like I said earlier, our model AI LED model targets better payback period. Now the better payback can come because the subscription revenue is slightly higher or because the sales effort is slightly lower or because the merchant is transacting more, the merchant is more lending propensity merchant, etc. Etc. Right. So it targets a whole bunch of different efforts which give us the roi. Right. So having evolved to that state, we are not going to override it by just saying hey, let’s just charge more subscription to everyone. So it’s hard to then boil it down to hey, is it going to be 60 rupees going to 65 rupees of subscription in my sense is in certain places we are going to see that years of investment have changed behavior to a point that merchant is actually okay to pay A little bit more. Right. Whereas in other areas you’re going to find that a merchant is quite engaged and as a result there’s more lending propensity in that area. So it’s a combination of these things. But I think it’s fair to say that subscription revenue on a blended basis will offset some of the PIDF production.
Jayant Kharote — Analyst
And regulation wise you didn’t have any prohibition on collecting subscription from PIDF merchants, right?
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
No, no, no, it was some of them, it was a capex subsidization by. The way, some of them may be actually already paying. So you got it.
Madhur Deora — President and Group Chief Financial Officer
Some of them do pay, but they do pay lower then our model would suggest, hey, let’s charge them a bit lower than what another merchant would pay, similar merchant might pay in another area.
Jayant Kharote — Analyst
Great. And that gives you some confidence that at least some cohorts can be moved up and offset on the.
Madhur Deora — President and Group Chief Financial Officer
Exactly.
Jayant Kharote — Analyst
The second piece is on lending. I mean in financial services I believe the non DLG mix is moving up. Right. So that would have cost caused a downward pressure on absolute revenue growth in that line and still we’re seeing very strong growth. So is it a MTF or is it more disbursements? Which of the two is really driving up that strong growth in fs?
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
MTF is not in our credit revenue by the way, it’s in financial services. But we don’t treat it as a credit line.
Manish Adukia — Analyst
It. Yeah, exactly. So DLG mix has gone down year on year. The LG mix has been broadly stable quarter on quarter. So just to clarify that, and we have seen that trend for the last three quarters, the vast majority of the revenue increase that you are seeing is because of a growth in disbursements. On the merchant lending side, personal continues to be, consumer loans continues to be challenged and secondly, very good efforts by our collections team which is resulting in good outcomes for our lenders which also gives us more revenue. So it’s been a combination of those two and that has broadly been the trend for merchant lending for 7, 8/4 in a row now.
So we are quite happy with the way that business is compounding and if.
Jayant Kharote — Analyst
I am correct, this comes in the base in the next quarter the mix change. That means from next year onwards, optically the growth should start looking better. On financial services.
Madhur Deora — President and Group Chief Financial Officer
Logically, yes, but I think on merchant lending those trends will broadly continue. So it won’t be like a jump sort of thing. But when you look at, you know, you can take a poll on sort of consumer loan cycle so we are sort of subject to that Cycle and postgrade being a larger contributor and all the very good success that we are seeing in mpf all of that puts this in a very positive and optimistic trajectory for next year.
Jayant Kharote — Analyst
Great. If I could just squeeze in one last question on payments. So these four basis points I can sense the change in the commentary tone from 3 to 5 to more than 4 comfortably. Is this also driven by rupee credit card on UPI and the online business and one of your peer has disclosed a very large market share on that product. Would you like. I know Vijay, last time you mentioned it’s a multiple of your current market share. Would you like to call out that number now or you think it’s still too early?
Madhur Deora — President and Group Chief Financial Officer
Sorry, on the first question you’ve got it exactly right which is yes there’s a contribution from rupee and UPI better sort of better credit card and EMI merchants and just growth in emi our EMI market share overall where we’re doing extremely well and we’re going to talk more about that about you know how we’re going to sort of take on that space in a much bigger way over the next year. Second question I didn’t quite understand.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Oh well you were saying you were talking about EMI I’m assuming no, no.
Jayant Kharote — Analyst
Credit card on sorry rupee credit card market share in that space. One of your peer has given the a very large number in 40s. What would be yours? Would you like to call it out right now?
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
I mean I’m sorry to say this market share is nothing but end up there revenue contributed and monetization so I.
Madhur Deora — President and Group Chief Financial Officer
Haven’T seen that comment honestly and we don’t actually we haven’t sort of gone and said hey what is our rupee UPI market share? You also. But I, I would, I would imagine that one thing is very clear.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
It’s by the way, by the way, by the way it’s I, I now get it. I think they’re trying towards consumer side UPI market share I’m sure I’m assuming you’re talking about consumer side UPI market share and there the clarity one was having that we not only have consumer side we also have a merchant side revenue and acquiring side margin. Yes, UPI unlike in other cases has a different type of distribution ratio which enough gives to the acquiring side business so we get double sided revenue and we get disproportionately large side of revenue on the merchant side and that is why we not only gain from the consumer side which probably you are saying the market but at the same point in time on the merchant side gets us revenue, higher revenue.
So we continue to drive based on two line items, the MDR wearing instruments, it is rupee and it is emi, both which are large.
Jayant Kharote — Analyst
Actually I was asking on the merchant side only since.
Madhur Deora — President and Group Chief Financial Officer
From this point, if you don’t mind because you got a long queue on merchant. We have, we think we’re doing very, very well on the acquiring side for rupee on upi. I don’t have the exact market share number and I don’t have reference to the comments that you are quoting from another peer nor do I want to just sort of tackle that head on. Anyway, what I will say is that it’s very clear from other people’s disclosure that our merchant base is actually a superior merchant base in terms of quality. So they are quoting higher sort of top of the funnel numbers.
So number of merchants etc. They’ve also said they have much higher PID of money. So our number which is also an indication that what we do is actually higher engagement and higher quality merchants and we’re very happy with that. The reason I bring that up here is that that has an implication on a merchant who’s more engaged is more likely to pay for rupee on upi. But we can see, we can check for these market share numbers offline and discuss with you.
Jayant Kharote — Analyst
No, this is, this is very clear, Madhur. The way you build out the funnel. It’s very clear. Congratulations for great set of numbers and all the best.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Thank you. Thank you.
operator
Thanks Jain. We’ll take the next question from Tiran engineer from CLSA followed by Vijit Jain from City.
Piran Engineer — Analyst
Yeah, hi guys. Hi. Morning. Just a couple of follow up questions personally on. Sorry, sorry. Quick housekeeping. We’ll just limit to two sharp questions because I do see seven, eight other analysts who are in the queue and we will extend. We’ll also extend the call to 9 o’. Clock. Perfect. One is just a data keeping question. The consumer UPI GMV that you mentioned of 5.1 trillion on page four, that includes P2P right? No, no, it does. Oh sorry, sorry.
Manish Adukia — Analyst
It does.
Piran Engineer — Analyst
So it is what NPCI gives as a number. Part of it is the fraction of that number. That’s what we are saying. It is what NPCI gives the GMV value. How much of that? So that’s both P2P and P2M to be clear. Okay, yeah. Then just my main questions. One is just a follow up on Jhan’s thing. So your payment processing margin has gone up but the payments revenue, the net revenue has not gone up in line or higher than gmv. And that’s because soundbox revenue is lower. Is my understanding correct?
Madhur Deora — President and Group Chief Financial Officer
Sorry, you’ll have to tell me what exactly you’re referring to.
Piran Engineer — Analyst
What we’re saying is that your margin is gone up, but not the overall number. Net payment margin or revenue gone up, is it?
Madhur Deora — President and Group Chief Financial Officer
Net payment margin as a percentage has not gone up, is that what you’re saying?
Piran Engineer — Analyst
So the net payment margin that you all disclosed, which was above 3 last quarter and above 4 this quarter, whereas if we calculate a payment margin as revenues divided by gmp, it’s actually gone down. The difference between what you all disclose as a net payment margin and the calculated one would be soundbox revenues. Right. So that’s really what I’m trying. To get at because as analysts, when. We calculate the take rates, it’s actually declined.
Madhur Deora — President and Group Chief Financial Officer
Mind if we take that offline? But my understanding is up 24%. Revenue is up 22%.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
QoQ. Sorry, Madhura is referring to QoQ.
Madhur Deora — President and Group Chief Financial Officer
Okay, so we’ll take that offline if you don’t mind.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Yeah, no problem, no problem. And just lastly on the rentals thing for soundboxes, now, merchants who’ve, you know, used it for the last two, three years because it’s been more than three years since the product is out, have you all been able to, you know, increase rents and if so, by what. I understand that you are looking at multiple parameters such as ability to lend to that merchant, etc.
Piran Engineer — Analyst
Etc. But can you just talk a bit about how you were able to monetize just on the rental bit for stickier soundbox merchants?
Madhur Deora — President and Group Chief Financial Officer
So there are two three factors. Without getting into the owner’s secret sauce, there are two three factors. One is a merchant who’s highly engaged is willing to pay more for the sound box and it may even be a higher end sound box, right? So they might want to take a tap sound box or they might want to take even a swipe sound box, AI sound box, etc.
Piran Engineer — Analyst
Right.
Madhur Deora — President and Group Chief Financial Officer
So they are willing to pay more. The second is our cost per sound box has come down dramatically if you’re talking about over a three year period. So the way our payback period math works is also quite different than it used to be three years ago. And the last point is that the payback does have weightage of lending propensity. If a merchant has been with me for three years, with or without the loan, they’re quite likely to be a high white list merchant. If they’ve been with us sticky for last three years. And that also goes into pricing and versus retention benefits versus lending density benefits.
So we do factor all of those in. So it’d be a generalization to say, hey, we do increase prices for everyone who’s been with us for one or two years because actually the model determines that and it’s been giving us good results.
Piran Engineer — Analyst
Got it. Okay. Yeah, that’s it from my end. Thanks.
operator
Thanks. We will take the next question from Vijay Jain from City followed by Pranav from mk.
Vijit Jain — Analyst
Hi, good morning. Good morning and congratulations. Good set of numbers here. Two questions from my side. One, you know, is digital gold sales a decent contributor to revenue and margins for you? I know you highlight on the app more than 5 million customers purchase gold and you also sell gold daily. You have a couple of products there. So just a quick word on that one. Secondly, I wanted to know, good to see your consumer UPI market share has started to go up 5.7 last quarter, 6.2. You’ve highlighted that as well. You know, where would you think you can get to in the near term on that front? And last question from my side, I’ll just ask all my questions together if that’s okay.
On the online business. Are you going. To focus mostly in expanding that in the D2C arena, in the new online ventures arena? Where. Where do you think the best opportunity for you lies? Those are my questions. Thank you.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
So I’ll start from the 3, 2, 1. So online our bet is lying that basically we could not onboard many merchants while we were serving the current merchant. So current merchant that we were serving versus the gap that has existed is brought out D2C merchants and so on. So I’m sure you can very easily comprehend that our offering is more consolidated not just online for online players but online plus offline because we day one built it like that. And then we also have a consumer over these merchant players, those who really completely lack that play that you can do.
So we are not looking at it as purely payment processing which is a very thin margin business. Rather we are looking at it how can we increase the business of this person. So it’s a commerce led business plan that we have on online and that inherently inherits that only large enterprise processors are not useful because they have their own businesses of acquiring consumers. So you can see the direction there. UPI share, market share, I want the world and I want it now. What kind of question is that? I mean we want to solve for market share, concentration, risk by our organic technology plans that’s it.
That’s our ambition, that’s our mission and we will keep at it. And I am very happy to tell you that we earn the right to be that once regulator permitted us last year October. So let’s remember we are less than one year old company man. It’s a. Every customer want to be acquired and that is what somebody should see. So I’m happy to see that you notice that. What is the ambition? Market share consultation problem solved. That’s it. Nothing else.
Vijit Jain — Analyst
Yes.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
And finally on the gold. It’s an easy one. I mean it works. People have their ways to acquire because we did the SIP and mutual fund sales and so on and then we discovered that there is a. I’m sure you know the distal gold as a category was built by PAYTM and we just saw that customers are rather more comfortable with gold and you know that every, every day gold numbers are showing up and so on. So it started to generate self interest in the customer. We don’t look at it as our winning bet or losing bet.
We look at it as a very consistent customer retention bet. Why do we give customer name like this? Because I believe if customer has a lock in on us with this, he will stay longer term. So we don’t look at it as a margin or classic revenue product but we look at it as let’s retain the customer by him committing something on our platform. Got it.
Vijit Jain — Analyst
Thanks Vijay. Just a quick follow up on that. So I mean what I was trying to get at is I’m assuming these would have some take rate for you as well, right? I mean some take rate either as a processing transactions etc. Must be a good profit pool.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Yeah. So the answer is that I would take down the take rate of the industry with our volume. You’ve seen us that we did it in many categories and we will do it. I rather would prefer to sell it on a least margin left over so that we can take care of the payment processing. For a payment processor this is too large number of numbers. It is rather easier for me to sell larger volume. So among the take rate, absolute value of profit and the number of customer, number of customers potential.
Vijit Jain — Analyst
All right, thank you. And you’ve expanded internationally in quite a few geographies. Now I’m wondering because I see some commentaries around this, you know is your interest in the Indian diaspora consumer side business here? There are remittance side businesses and opportunities there.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
No too exotic for us. We simply believe our merchant stack is very replicable, repeatable and we will try that whenever we Try that. So thank you.
Madhur Deora — President and Group Chief Financial Officer
So our, our focus remains as we have seen before, which merchant side business we haven’t quite expanded yet in the sense that we have set up. There’s a lot of foundational work that has been done. So we have created these entities in areas where we have concrete plans now. And over the next three to six months there might be a couple of announcements with respect to what specific specifically we are doing about partnerships we have entered into.
Vijit Jain — Analyst
Got it. Thank you Madhur and best of luck to you guys. Thank you so much.
operator
Thanks Vijay. We will take the next question from Pranav Kshatriya from MK followed by Rahul Jain from Dollar Capital.
Pranav Kshatriya — Analyst
Hi, thanks for the opportunity. My first question is on financial services. You know, good to see a growth double digit quarter on quarter growth on that product. Can you give some color on, you know what exactly is driving that? Because is there’s a personal loan, there is postpaid and there is equity merchant loan. You know a lot is happening. So some color on that. And secondly bookkeeping question, other direct expenses have gone up by 16% quarter on quarter. So you know what is driving that? So these are two more questions. Yeah.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
So simple thing is that like you might have heard in the early part that I’ve said that in the consumer side credit we are adding BNPL as a foundational way to expand on it. So a little bit of growth on that then secondly which also means that we are less interested and less distributing just a personal credit which we believe everybody who has an app can do it. So we don’t think that is a very differentiated mode. So we rather are doing it like this that will take over the distribution led business. So it may look flat but internally it’s very important to build a mode of payment led credit instead of just distribution of credit which is traffic led.
Okay. Now this being the personal loan, merchant loan is consistently growing. There is a great understanding by the industry, creditors or merchants, both sides that you do good, you get good credit. You do. And these are very good quality merchants and very good effort that PAYTM puts. So that is anyways the core reason. But at the same point I’m personal is gone into this and yeah P Mani started to show green shoots. So I mean equity broke share on a sequential basis would have sort of gone up, gone down because I did see a little bit of marketing around, you know a little bit gone up.
Huge expectations internally from the team.
Madhur Deora — President and Group Chief Financial Officer
So market share went up a bit and monetization went up a bit bit more than that because of MDF product and so on. On your second question Pranav, other direct expenses, a combination of FLDG which, which goes there as our merchant loan business is scaling and also a little bit higher collection costs. Those are the primary drivers.
Pranav Kshatriya — Analyst
Okay, cool. Thank you. That’s it from my side. Thank you.
operator
Thanks Ra. We will take the next question from Rahul from Dollar Capital followed by Suresh Ganpati from mcquary.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Morning Rahul. Yeah.
Rahul Jain — Analyst
Hi. Morning. Basically I have two questions. Firstly if you could have, have you since you have mentioned about the consumer monetization side if you could highlight some of the largest use cases you think could drive the momentum and some early.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Matrix on the PAYTM Check in app. If you want to share that single metrics on PAYTM Check in I want to tell you Rahul is we have a funnel that converts 30 plus percent. I mean it is shocking that you talk to AI and say that I want to book the cheapest ticket between Delhi, Bombay and next week and it has seven days and it has any out of the day and people find something so phenomenally good that they’re converting 30% 1/3 conversion of an AI query. I mean that is phenomenal for me because these are minuscule, less than 1% on a very large scale of OTA and 1% is considered very good.
So the second is, I mean I’m loving the product differentiation technology. Differentiation. It is one of the first product that we talked about by the way just in case so that you’re doing something where the AI takes the lead instead of a traditional way of doing it. So very, very happy with it.
Rahul Jain — Analyst
Yeah, I was saying what are the bigger use cases on the consumer monetization you mentioned 5, 6 name but value.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Wise if you think you can highlight one. Yeah, absolutely. I think wealth. So credit, credit wealth and this a la commerce equivalent which is called travel or deals etc.
Rahul Jain — Analyst
And just lastly any device penetration or you can say penetration on lending on the device merchant.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Do we track this number and what.
Rahul Jain — Analyst
You think is the right potential out here? Because I think this is the biggest mode we have. Yeah.
Madhur Deora — President and Group Chief Financial Officer
So it’s currently about 7% on our. So roughly just just under like a million loans a year which is also similar to million loans outstanding at any given point of time.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
On the device merchant base. On the device merchant.
Madhur Deora — President and Group Chief Financial Officer
So device merchant base only roughly 7% of that and it has been sort of going up give or take 1% year on year just to remind everyone. So the three main drivers of our merchant loan business in a sense number of devices which is growing at about 25, 27 lakhs year on year. Percentage penetration, which is broadly growing at about 1% a year, give or take. And then average ticket size which has been growing if you look at last four, five years compounded about 15% a year and slightly higher than that. And, and the last one has been driven by the fact that the repeat behavior on the platform is very, very strong.
I remember five years ago people had question as people want to take higher ticket sizes, will they really come? So in our model five years ago we had actually not assumed increase in ticket size. And in fact that has ended up being one of the major drivers for the growth of the business which is very positive because you are obviously know a lot more about somebody who’s a repeat first time and it’s much more predictable. So it has been those three drivers for the business penetration rate being one of the three.
Rahul Jain — Analyst
Yep. Madhu, Just one subset of that question was is there a number that we have identified that, okay, this is the, in terms of the transacting data or any other way you identify your filter, what is the right potential market? So 7 is the current thing but what is an ideal number that you could reach eventually?
Madhur Deora — President and Group Chief Financial Officer
This number could get as high as 20%. Our white list base is 40 to 50% typically.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Yeah. Right.
Madhur Deora — President and Group Chief Financial Officer
So and I’m assuming that the white list based on everyone will need a loan even once a year. And, but, but just to be clear, when we think about the business we don’t think about primarily can we drive penetration higher? We think about product market fit, we think about repeat behavior obviously we think about asset quality of partners for partners. And then on the merchant payment side we think about hey, are we getting relevant merchants on the platform? Are we getting high engagement from those merchants which makes our life much easier and penetration rate sort of ends up being the output metric.
Yeah. Thank you.
Rahul Jain — Analyst
That’s all from the side.
operator
Thanks Rahul. It seems that Suresh drawback. So we will take the next question from Param Subramaniam from Investec followed by Jagal Balia from om.
Parameswaran Subramanian — Analyst
Hi, thanks. Good morning Vijay and Madhur. Hi. So my first question is on the payment processing margin guidance. So we are currently trending comfortably above our long term guidance. So are we going to revisit this now? Because some of this seems to be a megatrend right on credit penetration picking up. I think I said that earlier, we’ll.
Madhur Deora — President and Group Chief Financial Officer
Probably look at that in the next two to three quarters. But currently we are seeing quite a.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Solid positive actually it’ll materially change when the MDR settles. Settles. If there is no MGR chatter this year then it stays in the same sequence and we continue to see the kind of merchant that we are adding. So there’ll be little bit of that etc. But normalizing here at the same product MBR will dramatically change it because as an acquiring side there is a huge amount of upside on MDR may not be on the consumer app. Actually I just want to be reminded all the money goes to the bank. How much of you, how much big app can negotiate money of the bank is banks losing money.
It is a bank losing money here in acquiring you have a responsibility. In consumer side you are just a layer like a leech on top of a bank.
Madhur Deora — President and Group Chief Financial Officer
And also sort of in a very indirect sort of way. It also depends on whether there is market enforced discipline on our peers. So if our peers are doing adjusted metrics and we are doing real metrics, then resource allocation can work a certain way. I have to say the market discipline has been okay. I’m not sure. I don’t particularly feel like last one or two years has been land grab but it’s good that that will continue.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Fair enough. Thank you. On the subscription revenue piece, right. So you said currently roughly we’re trending at 60 rupees a month sort of rental. Where was this say a quarter or so ago? Because I think you know coming back to a question that was asked earlier. Basically quarter on quarter your net payment margin that that number is lagging the quote on quarter GMB growth. So it seems to be led by the subscription revenue. So so where would your say rentals be versus say a quarter ago or so? Yeah, so. So if a person gets a loan, our loan team subsidizes and subventions and removes the subscription actually.
So subscription now subscription you may think that subscription has got reduced while the merchant has become higher valued. So the business model to be looked at is actually merchant, merchant, subscription, merchant, MDR and credit or any cross sell that’s a stack. It’s like saying voice revenue, subscription area or revenue. So that is where the approach is. So a quarterback I don’t know the number would know. But at the same point I’m not so congo or less concerned or more concerned about this number because I think acquiring more number of merchants and capturing more time of the merchant whom we can cross sell, upsell and monetize is the approach that I personally carry.
Madhur Deora — President and Group Chief Financial Officer
Number is probably and the number was slightly higher. You should also know that we do factor that like for like subscription per device even besides the submission that Vijay mentioned should go down some low to mid single digits every year and our efficiency on Capex and OPEX should be higher than that.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Yeah right.
Madhur Deora — President and Group Chief Financial Officer
So we are very conscious that there should not be lack of efficiency on our side that we are asking the merchant to subsidize.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Right.
Madhur Deora — President and Group Chief Financial Officer
We need to get more and more efficient so that merchant is getting the device for as, as efficiently and as cheap as possible. So that goes to sales productivity, that goes to CapEx, that goes to OPEX efficiency and so on.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Fair enough. Thanks Madhur. One last question if I may. This quarter on quarter decline in other indirect expenses is it almost entirely the pdd?
Madhur Deora — President and Group Chief Financial Officer
The big decline is because of pdd. There are things that we continue to do on making sure overall we are efficient. So big decline is because of pdd. And also we are doing a pretty good job of collecting receivables including provision receivables in the past. So. So our provisioning policy is also pretty tight.
Parameswaran Subramanian — Analyst
Fair enough. Thank you. Thank you and all the best Vijay Madhu.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Thank you.
operator
Thanks. Thanks. We will take a last question of the day from Jigarvadia from OM Group. You may go ahead please.
Jigar Valia — Analyst
Yeah good morning and thanks so much for this opportunity. My question pertains to Vijay sir, you mentioned that we are still very early days and customer acquisition is the game still and so if you have to look at it from a three to five year now can the growth rates kind of really sustain? I mean the kind of what we are trending and targeting and I think.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
As you’ve noticed we’ve always said the customer that matters. We’re not saying consumer market share, merchant market share, we are saying customer that matter consumer. So in the customers that matters in consumers in India based on next three, four years of economic growth and worthwhile monetizable useful I’m going To say about 250 million customers is a good number for us to aim. I mean what percentage of market would it be? That’s for market to discover. But at the same point of time I fundamentally believe we today’s monetization machinery wise have ability to monetize to 50, 50 million customers.
Now what market share market to decide. Got it.
Jigar Valia — Analyst
And while the land grab game still stays on, should we see an uptick in our meaningful uptick in depreciation going ahead? I mean we’ve really benefited quite a bit.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
It’s been amazing but appreciation I think. Because our Capex was quite low last year and much Higher the year before and we have brought the two to three year depreciation policy so next year you should not see an impact but as we increase capex for deployment then yes the year after that there might.
Jigar Valia — Analyst
Be an increase helpful and lastly congrats on the PAYTM check in and the AI thing. It seems interesting but from a spend perspective or this thing would and no that really comes after wealth so I’m.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Hoping, I think all our businesses are wise enough, self sustaining enough. In other words we are not dumping money throwing money on those things they are self learning. We have customer traffic, we have insight, we have built it on past so these are rather monetization stages instead of investment stage but at the same point of time I, I will continue to invest in this business because I think there is an extraordinary opportunity. There is a curve in consumer behavior, there is a curve in technology and that is where the opportunity got my answers.
Jigar Valia — Analyst
Thank you so much and best wishes.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Thank you so much. Thank you, thank you. Really appreciate everybody who joined us because I think this was the last question. And I think we had nearly 100% video on. 100 video on. Thank you so much you guys. One thing I just missed was AI question and I had some data guys and I’m not going to answer those numbers right now but to the team that is doing AI and to the team that when, when we internally are like building agents, agents that outrun and out execute LLMs LLMs have a limitation of pretending that they are the answer to the world problem but when it comes to real world problem they are not able to solve it. That is by the gap between the quick deployment of AI considering everybody uses software and how everything could have not become AI just in case and that offers an extraordinary opportunity.
I’m very proud of the team that is building these capabilities in our company. I’m going to show you some index and this is our index that you. Have best for the last type of thing. This is evaluating language model on real world enterprise.
Madhur Deora — President and Group Chief Financial Officer
This is a special treat for people who decided to stay well beyond 9am.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Yeah so the keyword is this is real world enterprise statement. So businesses have to use real world use cases and thought that this benchmark shows up and your favorite company tops this on two days back number. I mean I’m very proud to say we are much ahead of ByteDance, Alibaba and even ATT and we’re talking yeah Snowflake everybody. And it is not just number one for one use case. We are also on the number six use case that we are showing up here. Guys, you are underestimating the power of ability of companies that will not only leverage AI by asking their vendor to deploy, but they will create the use cases and they will create the use cases for optimizing cost or expanding the business line items.
And I’m phenomenally very happy to say this, this goes specially to the team that did it and with that intention that we will keep not just playing along but we will lead the race of AI in the country. I mean the attention to the artificial intelligence and capability of agent is. Is extraordinary and that is what will be the special attention in my life personally and rest numbers. You’re seeing it. So thank you so much for joining. It was great to see you all in the early morning. Anything else? Thanks.
operator
With that we come to an end of this call. A replay of this earnings call and the transcript will be made available on the company website subsequently. Thank you all for joining us. At 8am you may now disconnect your lines. Thank you very much.
Vijay Shekhar Sharma — Chairman, Managing Director and Chief Executive Officer
Adios. Bye bye.