Paytm Citi Bank Credit Card Launched in India[2019]

Paytm,  India’s one of the largest mobile wallet app, has launched  several businesses in recent years as threat from Google and Facebook grows. On Tuesday, it added another category to the list: Paytm credit cards.
The paytm firm, operated by One97 Communications, today unveiled Paytm First Credit Card with lofty benefits .The cards, issued by Citi Bank, will be the first in the country to offer unlimited, one percent cashback on purchases, Paytm claimed in a statement. The company is hoping to add about 25 million credit card customers in the coming months.

The penetration of credit cards remains very low in India with under 50 million people possessing one. With people in India conducting most of their businesses through cash in the nation, banks have little understanding of a customer’s credit history and score. And it also doesn’t help that banks in India are still wary of issuing credit cards to those who don’t perfectly fit the traditional blue collar job.Paytm made its name through a mobile payment wallet open to its customers engaging with credit card companies? Paytm itself is struggling to grow its business and retain existing customers. Some of its recent major bets haven’t exactly paid off.

But more importantly, payments itself has become a commoditized space. Users park their money in Paytm and do transactions from there. Paytm makes money from this accumulated sum. This business flourished for years, especially in the months after the Indian government invalidated much of the cash in the nation. But then the government launched its own payment infrastructure called UPI, which removes the need for a middleman.

This has made payments more convenient for users, who are increasingly jumping ship. UPI apps such as PhonePe that have emerged in the last two and a half years now see more transactions than wallet apps. To make matter worse for Paytm, Google and Facebook — two companies that have larger userbase in India — have entered the payments space. Google Pay reached 100 million installs on Google Play Store recently, and WhatsApp plans a nation-wide roll out of its payment feature in Indialater this year.So Paytm is now expanding its financial offerings and credit card play fits well in it. With more than 200 million active users, Paytm rivals banks on both the number of customers and volume of transaction it processes.

“Our new offering is designed to bring utmost flexibility to our customers in their digital payment options and will help spur large-ticket cashless payments,” Vijay Shekhar Sharma,  chairman and CEO of One97 Communications said in a statement.As part of the package, Paytm’s credit card holders will be able to avail dining, shopping, travel and other offers that Citi Bank provides to its privilege customers. In the first four months of issuing a card, the company will offer its customers discounts worth Rs 10,000 on spending of Rs 10,000.

Paytm First Credit Card will work both in India and elsewhere and support contactless transactions. Like any other credit card, customers will be able to pay back a sum in multiple monthly instalments. Paytm First Credit Card will charge users a nominal fee of Rs 500 that will be waived off if their spendings through the card exceeds Rs 50,000 in a year.

If the gamble works, Paytm will be able to retain some customers and convince many to do big-ticket transactions. For Citi Bank, this partnership is just an easy ploy to acquire some customers.
Earlier this year, the company launched Paytm First, a subscription bundle that includes access to subscriptions from other services such as Zomato,  Uber, Gaana, and Eros Now.
 
In the meantime, Paytm continues to aggressively expand its financial offerings. In recent years, it has launched a digital payments bank, and has started to offer prepaid Forex cards for international purchases. It also lets customers buy gold, and employers issue food allowance wallets for their staff. Last year, the company announced Paytm Money topurchase of mutual funds and it also announced the paytm insurance .