AvenuesAI accepts lower take rates to build AI data scale

In the second quarter of financial year 2027 (Q2 FY2027), AvenuesAI accepted a 4% sequential decline in its net payment take rate to 5.06 basis points to increase transaction volumes and build data for artificial intelligence. The trade-off coincided with 19% sequential growth in transaction payment value to Rs 1.77 lakh crore, while management acknowledged margin pressure and execution risk in TISco.

Why did AvenuesAI lower its payment take rate?

AvenuesAI lowered its take rate because management prioritised payment-volume growth and resulting transaction data over near-term unit economics. Vishal Mehta said the 5.06-basis-point net take rate in Q2 FY2027 was about 4% lower sequentially, calling the decision conscious and linking it to capturing festival-period volumes and expanding scale.

The payments business processed transaction payment value (TPV) of Rs 1.77 lakh crore in Q2 FY2027, up 19% sequentially. Management’s stated premise is that a larger volume of transactions creates more intelligence within the system, potentially enabling AvenuesAI to offer additional services to merchants and customers rather than pursuing immediate take-rate expansion.

How has lower pricing affected AvenuesAI's margins?

AvenuesAI said lower take rates are reflected in margin compression, even as Q2 FY2027 revenue increased. Operating earnings before interest, tax, depreciation and amortisation (EBITDA), excluding other income, was Rs 98.9 crore, compared with Rs 96.2 crore a year earlier, while revenue from operations increased 47% year on year to Rs 2,879 crore.

For the first half of FY2027, AvenuesAI reported revenue from operations of Rs 5,560 crore, up 71%, operating EBITDA excluding other income of Rs 199 crore, up 19%, and consolidated profit after tax of Rs 156 crore, up 24%. Revenue growth therefore outpaced operating EBITDA growth in both the quarter and first half, consistent with management’s comments on take-rate pressure and forward investment.

Management said artificial intelligence can produce productivity benefits, but that some benefits are currently being passed to consumers and merchants. It described AI costs as front-loaded in Q2 FY2027, including backend work on context engineering, software specifications and AI-first operating frameworks, rather than presenting the work as an established profit contributor.

What does AvenuesAI expect to monetise from transaction data?

AvenuesAI expects a larger transaction base to support monetisation through merchant services, intelligence and conversion improvements, but it gave no revenue forecast for individual AI products. Management identified transaction intelligence, merchant tools, forms, reconciliations and integrations as possible ways to earn more from the Rs 1.77 lakh crore of Q2 FY2027 payment TPV.

Its central product concept is TISco, which management described as a transaction intelligence score. Management said the product is difficult to build and explicitly stated that the probability is against its success, although it argued that more data from a larger transaction base could improve the odds and potentially create returns of “a few thousand X.”

AvenuesAI also cited AI Forms, in-WhatsApp payments through its Meta partnership, WhatsApp Rocket faster checkout, Apple Pay with Oberoi Hotels Group, CommerceAI 2.0 on Google’s A2A platform, and tap-to-own-device payments. The disclosed link is indirect: these products may raise TPV and deepen merchant relationships, which management views as inputs to its data and intelligence strategy.

What transaction growth is AvenuesAI targeting from partnerships?

AvenuesAI’s internal estimate is that partnerships and product launches could add Rs 50,000 crore to Rs 1 lakh crore of incremental TPV over the next 24 months. Management said it will track earnings potential from transaction conversion, distribution-led growth and higher-margin income from tools, forms, reconciliations and integrations.

The hospitality platform ResAvenue illustrates the distribution strategy beyond a standard payment gateway. ResAvenue serves more than 3,000 hotels, connects to almost 150 online travel agency websites and processed about 1.2 million room nights through its channel manager in the preceding 90 days.

Management said payment collection is integrated into reservation workflows, creating a payment opportunity alongside hospitality software. It also sees a possible future role for AI assistants in hotel booking, but this remains an opportunity under development rather than a revenue target; the disclosed operating base is the 3,000-plus hotels, 150 connected travel websites and 1.2 million room nights.

Can UPI MDR improve AvenuesAI's payment margins?

AvenuesAI said a UPI charge regime described by management as MDR could increase revenue and margins if implemented, but the terms and timing remain unresolved. Management said 38% to 40% of its transactions are currently processed free on UPI and that about 30% of those UPI transactions would become chargeable under the regime.

Vishwas Patel said implementation could occur in January or earlier, while stressing that AvenuesAI would wait for indications from the National Payments Corporation of India. Management did not quantify the financial effect, saying it would most likely provide an update by the following quarter after MDR takes effect.

The unresolved MDR outcome matters because management has cited it as one potential offset to the 5.06-basis-point take rate in Q2 FY2027. Vishal Mehta said payments remain competitive and that the eventual commercial outcome would depend on providers’ pricing and subvention choices, so the potential margin benefit is not quantified.

Conclusion

AvenuesAI is explicitly accepting some current pricing and margin pressure for transaction throughput, arguing that data can become the differentiator in AI-led merchant intelligence. The operating evidence is a 19% sequential rise in Q2 FY2027 TPV to Rs 1.77 lakh crore alongside a 4% sequential decline in take rate to 5.06 basis points, while operating EBITDA growth lagged revenue growth in the quarter and first half.

Next, investors should watch whether partnerships deliver the internally estimated Rs 50,000 crore to Rs 1 lakh crore of additional TPV over 24 months, whether MDR is implemented and quantified, and whether TISco moves beyond experimentation. Management said it will monitor the AI bets while maintaining FY2027 earnings-per-share guidance of Rs 8.75 to Rs 9.5.