Payment Gateways Brace for Rs 30,000 Crore Revenue Hit as Real-Money Gaming Ban Takes Effect

The Indian payment gateway industry is facing a significant setback as the recent ban on real-money gaming operations is expected to have far-reaching consequences on their revenue streams and transaction volumes.

Impact on Revenue Growth

Payment gateway providers are anticipating a substantial decline in their annual revenue growth, with estimates suggesting a drop of up to 15%. This downturn is directly linked to the government's decision to ban real-money gaming operations in India.

Transaction Volume Reduction

The ban is projected to have a severe impact on overall transaction volumes in the country:

• A reduction of at least Rs 30,000.00 crore annually in transaction volumes is expected.
• UPI transactions, in particular, are set to take a major hit, with an estimated monthly loss of 25 crore transactions valued at Rs 5,040.00 crore.

UPI Transactions in Gaming

The significance of gaming transactions in the UPI ecosystem is evident from recent data:

• In July, Rs 10,077.00 crore worth of payments were processed through UPI under the 'Digital Goods: Games' category.
• This represented 1.38% of the total monthly transaction values on the UPI platform.

Affected Payment Gateways

Several prominent payment gateway companies with exposure to the real-money gaming sector are expected to feel the impact of this ban, including:

• Razorpay
• PayU
• Cashfree

Online Real-Money Gaming Sector Overview

The ban affects a substantial and growing sector of the Indian digital economy:

• The online real-money gaming sector is valued at approximately $25.00 billion.
• It generates over Rs 31,000.00 crore in annual revenue.
• The sector supports 200,000 jobs across more than 400 companies.

Legal Challenges on the Horizon

The gaming industry is not taking this ban lying down:

• Major gaming companies, including Dream11 and Gameskraft, are considering legal action against the government ban.
• Potential court filings are expected as early as next week, likely to be submitted through the Karnataka High Court.

The repercussions of this ban extend beyond the gaming companies themselves, significantly impacting the payment gateway ecosystem and potentially reshaping the landscape of digital transactions in India. As the situation unfolds, the industry awaits further developments and potential legal outcomes that could determine the future of real-money gaming and associated payment services in the country.