Paytm brings instant short-term interest-free credit scheme


16 Nov 2017

Paytm now lets you borrow interest-free credit! Here's how.

Paytm has been expanding its range of services tremendously, and there's another new product in store.

Users can now claim instant interest-free short-term credit for regular transactions like buying movie tickets, paying bills, booking flights and more, that too without documentation or physical onboarding.

Paytm has partnered with ICICI Bank for the new product called 'Paytm-ICICI Bank Postpaid'.


All you need to know about the credit scheme

All you need to know about the credit scheme

A customer's 'credit-worthiness' will be assessed in real-time, based on their financial/digital behavior, purchase patterns and frequency of transactions. For this, ICICI will use Big Data.

Based on their rating, a customer might be offered credit of Rs. 3,000-10,000. They can repay in up to 45 days.

For now, only select ICICI customers can avail it. It will soon be extended to non-ICICI customers.

How will you have to repay?

A bill will be generated for customers on the first day of the month after they have availed the credit. They will have to repay by the 15th. Based on repayment patterns, a customer's credit limit might be expanded to Rs. 20,000.

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The man himself

Attempt to democratize access to credit: Vijay Shekhar Sharma

According to Paytm CEO Vijay Shekhar Sharma, this new scheme is based on trust. "We believe our customers are sincere with their payments.This (scheme) will democratize access to credit."

ICICI Bank Executive Director Anup Bagchi says it was based on "two distinct trends": one, many customers, especially those new to credit, are looking for short-term plans, and two, millions are now making purchases online.


What sets Paytm's credit feature apart?

What sets Paytm's credit feature apart?

MobiKwik entered the game sooner when it launched short-term credits in August. For the service, it partnered with NBFC Bajaj Finance.

Their joint 'Bajaj Finserv Wallet' now offers loans at zero-percent EMI.

ePayLater, which reportedly has over 2mn users, and Simpl also offer similar short-term credits for instant purchases.

However, Paytm's tie-ups with multiple firms across a range of services sets it apart.


This is Paytm's third new major feature in a month

Paytm is on a fast expansion track. Just this month, it launched "Inbox" to enable its 230mn users to send messages, share media and locations, and also make payments from the app itself.

After that, it launched yet another feature: it integrated BHIM UPI on its app, enabling users to make or receive payments using BHIM UPI from Paytm itself without switching apps.

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