Competition in digital payments has caused a collective loss of nearly $900 million (Rs 6,500 crore) for digital payment companies --  Paytm, PhonePe and Amazon's payments unit Amazon Pay in India for the year ended March 2020. 

The total loss for the three units translates to around Rs 18 crore per day. Compared to the financial year ended March 2019, the cumulative loss has gone down by 9-10%, but it is still more than double the loss in fiscal year 2018 (Rs 2,729 crore).

It is being said that continued aggressive spends on marketing and promotions led the losses incurred by these firms. Though two of these firms reduced cashbacks, but marketing & promotional spends and other costs remained high.

According to financial data accessed by Tofler, a business intelligence platform, One 97 Communications Limited, the parent firm of Paytm, reported its revenues for financial year 2019-20 as INR 3,351 cr, a 1 % fall since the last financial year. The company further reported a net loss of INR 2,833 cr during the same fiscal. This is 28 % decrease from the last financial year. The company’s total expenses for the fiscal were reported as INR 5,862 cr.

Amazon Pay (India) Private Limited, an online payment system, reported a net loss of INR 1,868 cr during financial year 2019-20 the same fiscal. The company’s total expenses for the fiscal were reported as INR 3,238 cr.

Though Amazon Pay (India) revenues for financial year 2019-20 increased to INR 1,370 cr, a 64 % jump since the last financial year. 

Phonepe reported a net loss of INR 1,771 cr during the same fiscal. This is 7 % decrease from the last financial year. The company’s total expenses for the fiscal were reported as INR 2,203 cr.

However, Phonepe's revenues for financial year 2019-20 increased to INR 427 cr, a 74 % jump since the last financial year, according to financial data accessed by Tofler.

Besides, Phonepe has spent on acquiring Bollywood actors Aamir Khan and Alia Bhatt as brand ambassadors for promoting the company through television commercials in order widen its reach to masses.

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