• Download the transcript for Pine Labs Q1FY27 earnings call here.

Pine Labs is rewiring its point-of-sale (PoS) business. For years, the company purchased card swipe machines and leased them to merchants for a monthly fee, pocketing a recurring rental income. However, the company has started asking merchants to pay for these hardware devices upfront instead of taking them on its own books, said Pine Labs CEO Amrish Rau at Q1 FY27 earnings call.

Here’s a closer look at what the management disclosed on the call.

1. PoS business sees a structural shift.

The management said that about 25-30% of PoS terminal deployments now require merchants to pay for devices upfront. While this would impact contribution margins in the near- to medium-term, given that hardware is intrinsically a low-margin business, the strategy allows the company to maintain a lighter balance sheet as they reduce depreciation costs and merchant attrition.

Outside India, Pine Labs does not invest in PoS terminals or terminal deployments at all. Instead, it is billing clients there for its software and the backend processing technology. Rau cited the example of GCash, a Philippines-based consumer payments company.

“Earlier, they used to be into QR payments. They now want to go into full-stack terminal-based deployments. In the last nine months, we have deployed 30,000 terminals with GCash, but all of them have been on a software and transaction processing basis. We really do not do anything on the terminal side,” Rau said.

Overall, the company aims to deploy 125,000 to 130,000 PoS terminals during the year, with about 90,000 to 100,000 already complete. Nearly 70% of PoS transactions now happen through UPI, the company said.

“On the terminal side of business, we’ve been growing in the 12-15% range on a year-on-year basis,” Rau disclosed.

2. Apple Pay’s entry into India to boost credit card transactions.

“We do believe Apple Pay will enter the market before the end of this year. What that is going to do is flip and create a spread in terms of how payment transactions will happen. More and more payment transactions will go back to credit cards, as credit card plus UPI continues to grow in the market. Credit card transactions will again be back in the field. We are already getting to see there is almost 10 to 15% growth in credit card payment transactions in the market,” Rau told analysts on the call.

Earlier today, Business Standard reported that Apple Pay is likely to launch its digital payments services in India in October. The report suggested Apple Pay would support credit card transactions, but not UPI payments.

According to Pine Labs, Apple Pay’s entry into India bodes well for the fintech company. “The more diversified the payment types, the more powerful the payment stack of Pine Labs”, it said. “So, we are feeling that the market opportunity is looking real”, it further added.

Last month, Apple resumed accepting credit and debit cards for Apple Account purchases in India after discontinuing the option in 2022.

3. Pine Labs’ issuing platform has grown into a Rs 100 crore business.

During the post-earnings call, Pine Labs’ management said that its issuing platform now generates roughly Rs 100 crore in annual revenue. This figure had not been previously disclosed.

Rau explained that its issuing platform extends beyond gift cards and includes prepaid cards, forex cards, and open-loop prepaid cards.

Citing an example of open-loop prepaid cards, the company said it is now distributing about 15,000 Bharat Yatra cards every month, which are NCMC metro-based cards.

Further, the company aims to launch meal cards, fuel cards and expense cards in October as part of its plans to expand its issuing business. According to management, this would enable greater tax savings for customers.

In its IPO prospectus, Pine Labs said it also earned breakage (income on unredeemed gift cards). On the earnings call, however, the management did not reveal how much breakage income it generated in Q1 FY27 or how many vouchers remained unredeemed.

4. Pine Labs bets on Blinkit, Zepto for gift cards.

The management also revealed that Pine Labs has started distributing gift cards through Blinkit and Zepto. This signals another shift. Quick commerce is increasingly becoming a key sales channel for digital gifting.

Pine Labs has also started distributing Roblox gift cards on its platform, which allow gamers to make in-game purchases. The company sees huge upside in the gaming segment, especially in in-app purchases.

“We think there is a huge opportunity in in-app purchases, and these in-app purchases, which will happen, can be bought with a gift card. For example, if somebody is on Roblox and wants to make an in-app purchase, they can use a Roblox gift card, something we are now distributing on our platform. We think the entire legit gaming segment is massive. We are investing in the distribution of that,” said Rau.

5. Agentic payments are driving revenue growth in the online business.

“We are seeing huge demand in the Indian market, especially on the agentic payment side. But the flow of that is actually visible in our online business,” said Rau.

Explaining further, he said the online payments space has undergone consolidation, with merchants now looking for more options and partners. During the quarter, Pine Labs went live with IRCTC to process digital payments on the platform. It also offers EMI on ticket purchases on IRCTC. Besides, it also processes transactions for Zepto, Croma, Reliance Retail and Lenskart.

“We think online, and what is going to come around agentic payments is going to be very interesting for Pine Labs. Our revenues in that business have continued to grow for a long period of time over the last three or four years,” said Rau.

The commentary comes on the heels of reports that the National Payments Corporation of India (NPCI) was working on a Unified Agentic Protocol. It would pave the way for AI agents to make UPI payments. In his article “How NPCI should approach agentic payments” in Reasoned, Nikhil Pahwa, founder-editor of MediaNama, argues that AI agents should have their own delegated UPI handles and separate PINs. The users must be allowed to set transaction limits for agents, Pahwa further argued.

In March, Pahwa wrote that Wallets are actually the natural approach to giving agents money, because they limit the surface area of impact: it is always what made wallets less risky than UPI. Bipin Preet Singh, co-founder of MobiKwik, who read his piece, agrees.

On the AI front, Pine Labs has also tied up with six banks and NBFCs for its AI-enabled underwriting tool SignalIQ, the management said on the post-earnings call. Additionally, it has also rolled out Credit Line on UPI in partnership with the Jammu & Kashmir Bank. Meanwhile, its EMI product has gone global, with services now live in the UAE and Singapore.

Earlier in its Q4 FY26 shareholder letter, Pine Labs said it was in talks with the NPCI to enable autonomous UPI payments via its Model Context Protocol server. Earlier this year, Pine Labs also launched P3P, an agentic payment protocol built on UPI that lets AI agents complete transactions on behalf of users. However, some concerns remain around data sharing.

In its Digital Threat Report 2025-26, CERT-In, the cyber wing of the IT ministry, proposed to mandate human-in-the-loop interventions in agentic AI payments above a certain threshold.

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