Digital payment firms in a no-win game as margins hit rock bottom

The digital payments ecosystem has become intensely competitive with the Reserve Bank of India issuing payment aggregator (PA) licences to more than 50 entities, pushing core transaction processing margins to what industry executives see as unsustainable levels.

These aggregators facilitate digital payments for online merchants in categories such as ecommerce, food delivery and travel. With a crowded field and large players like Razorpay, Cashfree, PayU and Paytm slashing rates, newly licensed firms are finding it increasingly difficult to scale…