Paytm customers will now have access to instant credit as the digital payment player has partnered with the country’s largest private sector bank, ICICI Bank, to jointly launch a new service called ‘Paytm-ICICI Bank Postpaid’. 

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The new service facilty will now offer an interest-free short-term digital loans up to Rs 20,000 for a maximum of 45 days, said a report on Moneycontrol.com.
 
“This new offering will enable millions of Paytm customers to get access to instant credit for the first time for everyday use-cases ranging from movies to bill payments to flights to physical goods,” said a statement issued by the ICICI Bank.

The statement further stated that Paytm-ICICI Bank Postpaid is a digital credit account with instant activation: with no hassles of documentation or branch visit, while activation is fully online. There is no transaction, joining or hidden administration fees either, it added.

The new facility will be available on all days at any time. It will reportedly use the Big Data-based algorithm by ICICI Bank for real-time credit assessment of customers.

It said: “The algorithm uses an intelligent combination of financial and digital behaviour of the customer including credit bureau check, purchase patterns, frequency of purchase to ascertain the credit – worthiness of a customer within a few seconds. Based on the credit-score of the customer, the bank offers up to 45 days interest-free credit limit. It ranges from Rs 3,000 to Rs 10,000, extendable up to Rs 20,000 based on the repayment history."

Paytm-ICICI Bank Postpaid will also offer a quick checkout to customers with the Paytm Passcode, the statement said.

The Paytm-ICICI Bank Postpaid will offer the credit limit to select customers of the bank using the Paytm app, and it will  also be available to non-ICICI Bank customers using the Paytm app soon.

Anup Bagchi, Executive Director, ICICI Bank said, “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. We have combined these two insights to bring out a novel proposition of giving short-term credit to people, completely online and instantly."

"We have leveraged upon Big Data to develop a new algorithm that instantly assesses the credit worthiness of customers using a combination of financial and digital parameters to sanction the credit line instantly,” Bagchi said. 

Meanwhile, Vijay Shekhar Sharma, Founder & CEO, Paytm said, “It’s common for us to ask a trusted friend for money for frequent expenses and promise to pay later. These exchanges are based on trust that you will pay back as soon as you have access to money."

Elaborating further, he said: "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. This will democratize access to credit including those with less disposable income. We are happy to launch credit in a digital way to the masses in the form of Paytm Postpaid with ICICI Bank as our first partner.”