ICICI bank to extend credit to Paytm users
Under ‘Paytm Postpaid’, customers can avail an interest free period of 45 days
E-commerce major Paytm has tied up with ICICI Bank to offer credit facility for its customers for up to ₹20,000. Paytm customers can avail the loan and enjoy an interest free period for 45 days — like credit card customers. After the interest free period, a 3% interest rate will be charged per month.
“ICICI Bank is tieing up with Paytm to offer short-term instant digital credit,” said Anup Bagchi, executive director, ICICI Bank, announcing the tie-up.
“The way it will work is, if you go to Paytm and buy a product, you will get various options for payment. One of the options would be, if you want to pay later… We will be able to credit score the customer instantly and give a credit line. And using the credit line they can purchase the products. We will use our own data, Paytm’s data and also credit bureau data,” said Mr. Bagchi. Once the credit limit is set for a customer, a consolidated bill is generated on the first day of the next month, which has to be paid by the fifteenth day of the same month. Customers can use their Paytm Wallet, debit card or internet banking of any bank for easy repayment of their dues.
Available 24×7 and on all days, it is based on a new Big Data based algorithm by ICICI Bank for real-time credit assessment of customers. The tie-up will help customers who do not have a credit card.
“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,” Mr. Bagchi said. ICICI Bank’s unsecured loan portfolio,which included credit card and personal loans, was ‘upward of ₹25,000 crore’, he added.
Vijay Shekhar Sharma, founder & CEO, Paytm said: “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. We are happy to introduce credit in a digital way in the form of Paytm Postpaid with ICICI Bank as our first partner.”
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