Real-money gaming ban may shrink digital payments by Rs 30,000 crore, hit gateways’ revenues

Payment firms brace for 15 per cent revenue dip as online gaming law tightens; UPI may lose 25 crore transactions monthly

New Delhi: The annual revenue growth of payment gateway firms operating in India is expected to dip by as much as 15 per cent following the suspension of real-money gaming (RMG) operations post the government brought new laws barring e-sports companies from offering such games.

Following the development, the digital transaction volumes in the country may shrink by at least Rs 30,000 crore this year. According to media reports, the sharpest impact will be felt by smaller, gaming-focused payment players, while larger gateways may see only a partial dent thanks to their diversified portfolios.

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Nearly 80 per cent of the impacted transactions would have been processed via the Unified Payments Interface (UPI) in any other scenario. According to a business executive with knowledge of the situation, this directly affects UPI’s monthly transaction volumes by about 2 per cent and its total value by about 0.5 per cent.

The scope of digital payments linked to gaming is demonstrated by data from the National Payments Corporation of India (NPCI). According to reports, 35.1 crore payments, or 2.8 per cent of the platform’s total volume, were made in digital Goods. Games category in July alone, totalling Rs 10,077 crore in transactions, or 1.38 per cent of UPI’s monthly value.

It is anticipated that UPI will lose approximately 25 crore transactions each month, valued at approximately Rs 5,040 crore, as a result of the ban. Major payment gateways with exposure to the RMG industry, including Razorpay, PayU, and Cashfree, would see pressure on their earnings.

However, compared to niche companies that only serve the gaming industry, the fallout is probably going to be less severe because of their substantial presence in other industries. With an estimated value of $25 billion, India’s online real-money gaming sector brings in over Rs 31,000 crore annually and pays nearly Rs 20,000 crore in taxes.

As a result, the regulatory crackdown has broad ramifications for the entire digital payments ecosystem in addition to gaming companies. Meanwhile, the Promotion and Regulation of Online Gaming Bill, 2025, which imposes extensive limitations on money-based online gaming platforms in India, was approved by President Droupadi Murmu, a day after the Parliament passed it.

Those who provide such services face severe penalties under the new law, which include fines of up to Rs 1 crore and imprisonment of up to three years. Promoting or advertising on such platforms can also result in fines of Rs 50 lakh and a two-year jail sentence.