India’s most valued startup, Paytm, has started talking about improving margins as loss-making private internet companies across the world come under pressure after office-sharing startup WeWork’s failed public offering. Paytm CEO Vijay Shekhar Sharma told TOI in an interview that the company will bring down its Ebitda (earnings before interest, taxes, debt, and amortisation) losses by at least a third to $350-400 million (Rs 2,470-2,823 crore) in the current financial year. The mobile payments and commerce major’s ebitda losses had tripled to $600 million (Rs 4,218 crore) in FY19. Ebitda is a measure of a company’s operating performance. The company, valued at over $10 billion, has cut down marketing spends on incentivising peer-to-peer transactions (P2P) in the payments business while completing heavy investment cycle in digital commerce businesses like movie and travel ticketing as they have matured. According to Sharma, Paytm has become “contribution margin positive”—meaning it’s making money on each transaction before corporate costs such as employee expenses and KYC fees. An increasing share of UPI (Unified Payments Interface) transactions has also helped the company cut payment gateway costs. At the Ebitda level, its losses have come down by 34% in the July-September quarter as compared to January-March in 2019. “These businesses (commerce) have matured and brought in network effect after three years of investment phase. We will continue to invest $150-200 million in the payments business,” said Sharma. Paytm has completely cut incentives on P2P UPI transactions after seeing a group of customers conduct millions of transactions of Rs 21 between its network and other rival players, which primarily include Google Pay and PhonePe, just to earn cash-back. Paytm’s overall transactions on UPI, the fastest-growing payment mechanism in India, have been declining as compared to peers which have seen an increase. But the firm is doing this deliberately and is only incentivising merchant transactions on UPI. “We have very actively made sure that we maintain a dominating market share in merchant payments in UPI,” said Sharma, claiming that Paytm has 68% share of UPI merchant transactions.