Mswipe, a Mumbai-based B2B payment service provider, recorded marginal growth in revenue while successfully reducing its losses for FY24. The Alpha Wave-backed company is navigating a fiercely competitive fintech landscape with a focus on sustainability over rapid expansion.
Revenue Growth Remains Tepid
Mswipe’s operating revenue inched up by just 1% to Rs 276.9 crore in FY24, compared to Rs 274.4 crore in FY23, as per its filings with the Registrar of Companies. Including non-operating income, the total revenue rose slightly to Rs 282.2 crore, a modest 1.39% increase.
The firm specializes in providing point-of-sale (POS) solutions, including card payments, digital wallets, mobile payment apps, bank apps, contactless payments, and QR codes. Transaction processing fees remained its primary revenue driver, contributing 63.09% of the operating revenue. This segment grew 7.6% to Rs 174.7 crore in FY24.
Support service fees showed slower growth at 4%, reaching Rs 70.1 crore. However, the signup fees—a key income stream—plunged by 44.4% to Rs 5 crore, underscoring challenges in onboarding new customers.
Expense Trends: A Balancing Act
Mswipe managed to bring its total expenses down marginally by 0.3% to Rs 327.3 crore. The company’s largest cost component, IT expenses, grew 5.2% to Rs 164.2 crore, accounting for 50.16% of total costs.
Here’s a snapshot of Mswipe’s key expenses:
- Employee benefits: Dropped 2.2% to Rs 77.3 crore.
- Depreciation: Rose by 7.1% to Rs 34.5 crore.
- Other expenses: Added Rs 51.3 crore to the tally.
Despite higher depreciation and IT costs, the company’s ability to control overall expenditure highlights its push toward cost efficiency.
Improved Loss Metrics and Financial Position
Mswipe reduced its net losses by 5.7%, bringing them down to Rs 46.2 crore in FY24 from Rs 49 crore in FY23. Its Return on Capital Employed (ROCE) stood at -16.94%, while the EBITDA margin improved slightly to -2.09%.
On a unit level, Mswipe spent Rs 1.18 to earn a rupee of operating revenue, showcasing a better cost-revenue balance compared to the previous year. The company’s financial strength is further underpinned by Rs 262 crore in current assets, including Rs 157 crore in cash and bank balance.
Regulatory Wins and Future Prospects
A significant milestone for Mswipe in FY24 was obtaining a Payment Aggregator (PA) license from the Reserve Bank of India (RBI) in February. This license enables the company to offer comprehensive payment solutions to businesses, enhancing its value proposition in the fintech space.
To date, Mswipe has raised over $125 million from marquee investors, including Matrix Partners, B Capital, and Ola. However, like many fintech firms, it is prioritizing loss reduction over aggressive growth to navigate a rapidly evolving market.
What Lies Ahead?
The fintech space is becoming increasingly competitive, with technological shifts and cost pressures creating a challenging environment for payment service providers. Mswipe’s strategy to focus on sustainability rather than scale could set it apart, but 2025 will be a crucial year to determine whether this approach pays off.
Comments