Paytm talks to banks for co-branded cards

Paytm is in talks with “various” banks to launch co-branded cards and plans to issue two million new cards over the next 18 months, as the fintech company pushes to deepen its foray into the credit card issuance and management business.

As part of the plan, the Noida-based fintech major’s popular digital payments app is set to double up as the digital interface to manage the finances linked to the credit cards of customers who receive the new cards, the company said in a statement that was shared with ET.

Bhavesh Gupta, the newly appointed CEO of Paytm’s lending business, is set to undertake this project.


“In our country, credit cards are still considered a product for the affluent sections of society and not everyone can avail of its benefits,” he said in the statement.

“At Paytm, our aim is to provide credit cards that benefit India’s aspiring youth and evolved professionals,” Gupta, who was earlier the CEO of Clix Capital, added.

The move comes at a time when financial institutions have seen an increase in first-time digital users, as adoption of contactless payment solutions have gained traction due to the Covid-19 pandemic. It is also in tandem with Paytm’s long-term ambition to be a full-fledged financial services player.

"Given the limited access to banking, stringent documentation and long processing times, India’s credit card penetration stands at only 3% compared to 320% in markets such as the United States," it said, adding that the company plans to gain a share of at least "10% of this market."

To be sure, RBI regulations only allow scheduled commercial banks to issue credit cards and take such risks on their books.

Paytm is, therefore, in the process of finalizing partnerships with banks that will enable ‘co-branded’ offerings with licensed lenders. The company, however, did not disclose the names of the prospective partner banks as they have yet to be formalized.

Paytm already has a co-branded credit card offering with Citibank.

The SoftBank and Alibaba-backed fintech giant also runs a ‘Postpaid’ service on its app in partnership with non-bank lender Clix Capital, which offers personal loans to a limited set of eligible borrowers.

"Paytm's credit card will provide insurance protection against fraudulent transactions to protect users’ money," the company said. "This service will also come with a personalized spend analyzer, helping in assessing expenses and planning future spends smartly."