The Noida-based fintech firm is in discussions with SBI Card, Bank of Baroda, Standard Chartered and IndusInd Bank to issue a new range of co-branded cards for about 17 million small merchants on its network, sources with knowledge of the matter told ET.
The new range, similar to its previous co-branded offerings with Citi Bank and SBI Card, would be available for merchants through its mobile application, they said.
The move comes at a time when the payment-led fintech startup is trying to pivot into a full-fledged financial services player. The company recently announced its entry into personal and merchant loan businesses.
Paytm, SBI Card, IndusInd Bank and Standard Chartered did not respond to emails till the time of going to press.
BOB Financial Solutions Ltd (BFSL) is looking at prospective co-branded partnerships, said Shailendra Singh, the CEO of the non-bank subsidiary of Bank of Baroda that issues credit cards, without delving into specifics.
BFSL is “open to co-branded partnerships that can add value to both partners and their customers. We cannot comment on any specific partnership till the same is finalized,” Singh, who is also managing director of BFSL said in an email.
Bhavesh Gupta, the CEO of Paytm Lending, recently told ET that the company plans to disburse Rs 1,000 crore worth of loans to its merchants in the current fiscal year, as against Rs 550 crore in the previous financial year.
Its payment rivals Google, Mobikwik and PhonePe, too, have made meaningful forays into facilitating financial offerings such as loans and insurance, in partnership with licensed players over the last year.
“With our collateral-free instant loans, we are trying to help kirana (corner) stores and other small business owners who have been left behind by the traditional banking sector and do not have easy access to loans and credit,” Gupta, who recently joined Paytm from Clix Capital, had told ET.
The company is among the leading merchant acquirers through various payment solutions such as QR code, Unified Payments Interface, Point of Sale terminals and wallets.
The fintech player currently issues co-branded cards in tie-ups with Citi Bank and SBI Card for its customers.
The working dynamic of these tie-ups is such that aggregators — like Paytm — use their platforms — which receive millions of customer-visits every day — as a live marketing and application interface while also taking care of the distribution network.
The banks, on the other hand, take care of the processing costs and value-added service expenses such as cashbacks.
The underwriting of the cards is done by banks’ analytics engine, which apart from using credit information bureau scores, also uses other data metrics including payment behaviours on these digital platforms to gauge the creditworthiness of customers.