PayTM Launches It’s Own Credit Scoring System
For the last couple of years, India’s leading digital payment firm, Paytm, has branched out its business into different segments while integrating numerous products to its platform in the process. “Branching out” continues and recently Paytm added two new insurance firms (Paytm General Insurance Corporation Ltd. And Paytm life insurance Corporation Ltd) to its long list.
Paytm’s parental company, One97 communication limited, now owns a total of six companies, including Paytm, Paytm Mall, Paytm Money, Paytm Payments Bank, plus the two insurance companies I just mentioned. One97 is aiming to create a myriad of services under one brand.
PayTM Score Will Be the Brand Name
In line with India’s first Credit Information Company, CIBIL score, Paytm has also decided to launch its own credit card scoring equipment known as Paytm score. Unlike CIBIL’s scoring system, which only takes into consideration the client’s transaction history, Paytm score is intended to grant credit ratings based on the client’s digital transactions online.
The initiative is intended to fortify Paytm’s loaning vertical. Paytm ventured into the credit industry in November 2017 after acquiring its Mumbai based online startup, CreditMate. Since then, it has teamed up with ICICI bank to launch “Virtual credit card and Paytm-ICICI Bank postpaid;” which offers credit free, short-term digital loans to clients.
Paytm score is designed to take into consideration digital transactions across its application offerings such as booking platform, e-commerce, and digital wallet. After keenly analyzing each digital transaction, Paytm score will give a credit score rating based on the combinations.
Partners In On The Action
Subsequently, Paytm will forward these newly generated credit scores to lending companies it has partnered with. In fact, the firm has already approached several digital lending companies and a handful of non-banking financial firms with its upcoming Paytm score and Paytm credit features.
Paytm is undoubtedly taking a huge step toward becoming the next big venture in the credit segment; all thanks to its digital payments and user base integrations.
The primary source of revenue for Paytm payments Bank is financial services and products.
Bearing in mind that Paytm Payments Bank cannot lend cash directly, the company has set up a new, separate firm called Paytm financial Services to retail financial products and services in its place.
To sum up, The Indian government has initiated a fight aimed at bridging gaps in the nation’s banking system and bringing more clarity to the country’s online lending processes. Provided Paytm Score does not get caught up in any regulation hurdles, it could be a safe haven for Indians who engage in digital transactions but do not have a credit history.
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