Pine Labs co-founder Amrish Rau told analysts during the Q2 FY27 earnings call that the National Payments Corporation of India's 0.4% fee on UPI person-to-merchant transactions exceeding Rs 2,000 could add Rs 80-230 crore to the company's annual income. MediaNama reported that this potential revenue is substantial compared to the firm's Q2 FY27 operating revenue of Rs 806.2 crore. Rau noted that 75-77% of transactions on Pine Labs' point-of-sale devices now use UPI, while only 25% involve cards, creating a direct path for recurring earnings from the new fee structure.
To retain merchant UPI activity that previously flowed to competitors, Pine Labs intends to install approximately 10 lakh soundboxes across India. Rau explained that merchants often use rival soundboxes for a portion of their sales because UPI previously offered no monetisation for the device provider. By placing its own hardware, Pine Labs aims to capture those transactions. The strategy reflects a broader shift in point-of-sale economics, as management indicated that merchants may find it difficult to pay both monthly device rentals and the new transaction fees simultaneously.
Rau stated that the market will likely move toward transaction-based commercials rather than fixed rentals. During the Q1 FY27 earnings call, management had already noted that 25-30% of new terminal installations required merchants to purchase the hardware upfront. Pine Labs is also preparing for agentic payments, with Rau describing the company as fully ready to handle purchases initiated by consumer AI assistants. However, he acknowledged that consumers remain hesitant to share card and bank account information with personal agents, a challenge the company is addressing over the next two months.
The fintech firm is broadening its issuing platform to include new use cases, having integrated gaming services like Roblox, Xbox, and Nintendo for prepaid solutions. In its investor presentation, Pine Labs reported that 89% of code changes are now made by AI agents. Additionally, the company has begun facilitating installment payment services for India's top four quick commerce platforms and plans to introduce an employee tax benefit card by early December.