To start with, the facility will be rolled out for ICICI Bank account holders who have Paytm and later will be extended to others.

Paytm ties up with ICICI Bank to extend short-term credit to users
Atom Tech Shorts Friday, November 17, 2017 - 11:23

Paytm seems to be rolling out aggressive moves in the digital payments space. The latest announcement coming out of the e-wallet company is the proposal to extend short-term credit to the Paytm account holders and this will be done with the involvement of ICICI Bank (through the bank’s Postpaid product).

According to a report in Economic Times, under this arrangement, those using the Paytm app on their smartphones can make a request for a credit up to Rs 10,000, which may get enhanced to Rs 20,000 later. The money can be used by the individual to make online purchases, effect digital payments through Paytm since the amount will be available on the Paytm passbook only.

The way the proposed extension of credit line will work is the deployment of Big data technology to make a quick analysis of the past credit report of the individual and then approve the loan. Paytm will raise a monthly bill on the 1st of every month and allow the customer time till the 15th to make the payment. This is more or less the credit card model. The major difference is that this is a pureplay digital money with no physical issue of a card. It will work within the Paytm app.

To start with, the proposals will be considered from ICICI Bank account holders who have subscribed to Paytm. In the next stage those with accounts in other banks may also be included for the benefit.

The proposal is looking at this concept from two clear perspectives. One is the sudden need for credit. You find a nice smartphone or any other product online and wish to buy it since it going at a huge discount, but you don’t have the funds to make the purchase. This short-term credit will be very effective in such cases.

Another area Paytm is looking at are the first-time users of facilities like smartphones and making online purchases. Many of them may not have any credit history and may not be sure of getting a credit card for various reasons. This could prove to be extremely useful for such people.

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