Mswipe, a Mumbai-based B2B payment service provider, has faced significant challenges in growth for the fiscal year 2024 (FY24), culminating in a net loss of ₹46.2 crore. Despite these challenges, the company managed to slightly reduce its losses as compared to the previous year, which reflects a cautious approach in a competitive fintech landscape.
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The consolidated financial statement of Mswipe filed with the Registrar of Companies reports a very slight revenue growth of 1%, as the operating revenue increases from ₹274.4 crore in FY23 to ₹276.9 crore in FY24. The company seems to have stalled growth and hence faces questions on whether it is moving fast enough to respond to the rapidly changing payments market.
The largest source of revenue for Mswipe is still its transaction processing fees, which comprised 63.09% of its total operating revenue. This segment grew by 7.6%, bringing in ₹174.7 crore in the last fiscal year. Other revenue streams were mixed, with support service fees growing by 4% to ₹70.1 crore, while income from signup fees dropped 44.4% to just ₹5 crore.
Overall, Mswipe’s revenues, including non-operating, increased by a modest 1.39% to ₹282.2 crores.
There was a slight decline in total costs of the firm. Total costs for FY24 were `327.3 crores, that is 0.3% below the figure recorded during the previous fiscal. Costs of IT and communication remained the most significant cost head that accounted for 50.16% of the overall costs and increased by 5.2% to ₹164.2 crores. Employee benefits expenditure, for one, went down by 2.2%, totaling to ₹77.3 crore. In comparison, the increase in depreciation cost stood at 7.1%, standing at ₹34.5 crore as added with other expenditures aggregating ₹51.3 crore against the liability of the firm.
Though Mswipe’s losses have been marginally reduced, its financials still show a long way to go. ROCE was at -16.94%, while EBITDA margin was at -2.09%, showing that it is still not easy for the company to be profitable. Mswipe has spent ₹1.18 to make every rupee of operating revenue in FY24.
As of March 2024, Mswipe reported ₹262 crore in current assets, including ₹157 crore held in cash and bank balances, providing a cushion as it navigates through these turbulent times.
In February 2024, Mswipe was granted a payment aggregator or PA license from the Reserve Bank of India. Through this license, Mswipe will become capable to offer a broader basket of payment solutions to the businesses, thus enhancing its capabilities and also hopefully its market position.
Amidst the competitive pressures in the fintech sector, Mswipe seems to be following a trend among B2B firms that prioritize cutting losses over aggressive growth strategies. As the payment service landscape evolves rapidly, 2025 is going to be a very crucial year for Mswipe and its peers as they try to perfect their business models and achieve sustainable growth.
Growth and financial woes in FY24 will prove challenging for Mswipe. But whether it manages to be agile enough in adapting to changes in market dynamics, as well as focusing on enhancing service offerings while cutting costs, would remain to be seen. For the next fiscal year, the outlook for Mswipe appears quite uncertain. Still, the right adjustments may be made to put Mswipe on the right path for a more robust performance in the highly competitive fintech space.
