In a first, India’s largest payments platform Paytm will now disburse short-term digital credit to its users in partnership with ICICI Bank Ltd.
The private lender’s customers will get interest-free credits of up to Rs 3,000, Rs 10,000, or Rs 20,000 based on their credit score, the two companies said in a joint statement today. These loans will have to be repaid within 45 days.
“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,” Anup Bagchi, executive director at ICICI Bank said in the statement.
The Paytm-ICICI Bank Postpaid feature will use big data to develop an algorithm that assesses the credit worthiness of a customer within seconds, allowing them to access funds, he said.
The instant credit system will give people with less disposable incomes access to short-term loans. Customers will be able to pay for anything ranging from movies, bills, flights and goods through this account, the statement said.
The Paytm-ICICI Bank Postpaid account can be availed of through a free online registration process. In the initial stage, the credit limit will be offered to select customers of the bank using the Paytm app. It will shortly be available to non-ICICI Bank customers using the app, the statement added.
It’s common for us to ask a trusted friend for money for frequent expenses and promise to pay later...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.Vijay Shekhar Sharma, Founder And Chief Executive Officer, Paytm