Paytm has been trying to become the one stop banking solution for all your banking needs. In the quest to do so, it has been continuously trying to bring in updates and changes to the service provided by Paytm. In a latest bid, Mumbai-headquartered banking and financial services company, ICICI Bank, has partnered with Paytm to launch a short-term, interest-free credit line aptly called Paytm-ICICI Bank Postpaid. The newly-forged alliance with ICICI will enable the digital payments platform to offer instant loans to customers under its “Buy Now Pay Later” scheme.
Anup Bagchi, Executive Director of ICICI Bank, while speaking about the development mentioned,
“We are now witnessing two distinct new trends: One, many customers – who are new-to-credit and, therefore, do not have a credit history are looking for short-term credit. Two, millions of young Indians are now buying products online. We have combined these two insights to bring out a novel proposition of giving short-term credit to people, completely online and instantly.”
Adding to this Paytm founder Vijay Shekhar Sharma, mentioned,
“It’s common for us to ask a trusted friend for money for frequent expenses and promise to pay later. These exchanges are based on trust that you will pay back as soon as you have access to money. We believe our customers are sincere with their payments and Paytm Postpaid will play a major role in helping them pay for their daily expenses on time. This will democratise access to credit including those with less disposable income. We are happy to launch credit in a digital way to the masses in the form of Paytm Postpaid with ICICI Bank as our first partner.”
Although relatively young, the fintech market in India is undergoing a phase of rapid growth and is forecasted to cross $2.4 Bn by 2020, as per reports by KPMG India and NASSCOM. The digital payments platform made its first foray into the short-term loan market in October 2016 when it launched a consumer credit line.
To avail the service, users will have to create a digital credit account with instant online activation. Once the bank has evaluated the customer’s credit score, loans ranging from $46.2 (INR 3,000) to $154.2 (INR 10,000) will be disbursed to his/her account. The platform relies on a credit assessment algorithm for real-time evaluation of the customer’s creditworthiness, which takes into account credit bureau records, purchase patterns as well as frequency of purchase.
With other tech giants like Uber, Google, Amazon, Hike and WhatsApp eyeing a piece of the country’s fintech market, Paytm has tough competition ahead. Hence, it will be great to see how this new move turns out.