In the midst of a surge in disposable income and a notable increase in point-of-sale transactions on e-commerce platforms, the utilization of credit cards has witnessed a remarkable upswing. The Reserve Bank of India’s data reveals that credit card expenditures have been scaling unprecedented heights each month. The insightful analysis of these evolving consumer trends has not only unveiled potential avenues but has also paved the way for tailored credit offerings. One such story is the emergence of Paytm’s co-branded credit cards, entailing enticing discounts on travel, movie tickets, and various other perks.
Currently collaborating with two of India’s foremost credit card issuers, HDFC Bank and SBI Card, Paytm has strategically positioned itself to reap the rewards of this burgeoning market. These partnerships have translated into upfront distribution revenue and a lifetime usage fee. Access to these cards has been made seamless through a straightforward application process available within the Paytm app.
As of June 2023, a remarkable milestone has been achieved with the activation of 7.5 Lakh credit cards, showcasing an impressive quarterly increase of 1.6 Lakh cards. Noteworthy growth has been witnessed not only in the issuance of new credit cards but also in terms of transactional volume. This positive trajectory is anticipated to persist, propelled by strong cross-selling prospects stemming from Paytm’s extensive existing user base, many of whom have previously availed loans via the platform.
Vijay Shekhar Sharma, Founder and CEO, highlighted the pivotal role played by banks and non-banking financial companies (NBFCs) in facilitating accessible credit for consumers. He emphasized the substantial untapped potential within the customer base. Sharma remarked, ““You can see the growth in the credit card spends, you can see the growth on BNPL equivalent, whether it is a large ticket or a small ticket on the counter is the growth direction. While the debit side has plateaued is not what I would say. There is a large customer base still pending to come on board. But definitely, credit is adding the flare of extra revenue and it will add to the net bps margin continuously.”
Furthermore, Sharma envisages credit as an increasingly favored mode of payment. He foresees India standing at the brink of a payments revolution, with credit emerging as the mainstream choice. “India is at the cusp of the next payments revolution where credit will become the mainstream payment choice. Our users are already savvy on QR code-based payments and with RuPay credit cards working on UPI QR codes, transactions through mobile phones will get a further boost, marking a new era in digital payments,” he had said during the launch of Paytm SBI Credit Card.
Sharma noted that the nation’s populace, already well-versed in QR code-based transactions, is poised to receive an additional boost with the integration of RuPay credit cards with Unified Payments Interface (UPI) QR codes. This convergence is expected to usher in a novel era in digital payments, amplifying convenience and accessibility.
Notably, the credit card landscape in India continues to present substantial untapped potential, offering a vast arena for exploration and growth. The buoyant trajectory of Paytm’s co-branded credit cards stands as a testament to this expanding frontier.
