PayTm Payments Bank, launched in November 2017, released its First Credit Card with Citi Bank. This is a step towards the company becoming a full-financial service provider. The card provides a 1% unlimited cashback worldwide. However, it already has 40 million outstanding debit cards in use.
As threats from Google and Facebook grow, PayTm makes another advancement in one of its several branches. In recent attempts to become a full-financial service provider, the company launched its First Credit Card. The credit card is powered by the Wall Street giant, Citi Bank.
"This is a partnership between two incredible companies" – @vijayshekhar
More details soon! pic.twitter.com/nGxk6Pqt1N
— Paytm (@Paytm) May 14, 2019
Why did PayTm choose credit cards?
PayTm Payments Bank launched its own app a month back.
It was seen to still operate with online transactions. But what was the need for credit cards for a mobile wallet app?
Although the startup-turned-company saw big business days when demonetisation was in the air. But then, Indian Govt. launched its own app: UPI. This removed the need for a middleman, thus users jumping ships. The competition is so fierce for already for the company. Google Pay, or Tez, has seen 100 million installs recently. Also, Facebook-run WhatsApp also plans to launch its payment feature in India, later this year.
Users store money in their PayTm wallets and use that later. The company has been profiting from that accumulated sum. Though, from the recent options and competition, app usage has seen a gradual decline. Thus, Credit Cards!
The new credit card offering will be available through the mobile app. This would add another option to the existing financial services. These options were also, according to many analysts, a result of the desperation to stay up in the game.
You can build a number of services around payments. Now that’s a business model. Payment itself can’t make you money.
– Vijay Shekhar (Founder, CEO)
With its launch in November 2017, it already has 40 million outstanding debit cards. Also, of its 300 million installs, only half of them are reported to be ‘active’.