The company, which recently received the Reserve Bank of India’s nod to resume onboarding of new merchants, recorded a loss of Rs 133 crore in FY23, a significant jump from Rs 3 crore in the previous year.
Total expenses more than doubled to Rs 750 crore during the year, mainly on account of employee costs jumping to Rs 198 crore from Rs 96 crore in the previous fiscal.
Cashfree currently derives its revenues from payment gateway processing charges that it provides to online merchants.
ET had previously reported that the nearly-a-year-old regulatory ban in 2023 on payment aggregators like Paytm, Razorpay, Cashfree and PayU to onboard new merchants and businesses has forced these firms to scout for alternative revenue sources.
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For instance, in February last year Cashfree acquired one-click checkout company Zecpe to target the direct-to-consumer segment with faster checkouts.
Through the acquisition, the payments provider was also looking to add capabilities such as return to origin (RTO) reduction on returns, fraud detection and address pre-filling to improve the shopping experience of consumers of D2C brand partners.
While the restrictions opened up the market for rivals such as Plural from Pine Labs, PhonePe, Innoviti Payments and Billdesk to sign up new merchants aggressively, for Cashfree and arch-rival Razorpay the embargo meant slower growth, stagnating revenue and, in turn, stress on valuations.
The impact of the RBI embargo on the topline of these companies is expected to be clearer in the full year revenues of the ongoing fiscal FY24.