Paytm to foray into financial and insurance premium payment business
Digital commerce companies seem to go to any length to bring scale, and in a latest bid Paytm is entering the financial services business over the next two weeks. The company’s association with Manappuram Finance and Muthoot Fincorp will enable Paytm to diversify its portfolio of services.
With this launch, the financial services business of Paytm will offer the customer the ability to repay his loans using Paytm. Paytm will kick-start the services with gold loan repayment. Subsequently, it would also provide the facility of renewing insurance policies on its platform.
Importantly, SBI General Insurance would be the first insurer to go live on Paytm. Currently, the Alibaba-funded venture does more than 100 million orders of various digital and physical goods every month.
Kiran Vasireddy, Senior Vice President of Paytm, said,
We are excited to launch financial services which will enable us to tap into the ripe market for online financial transactions in India. We believe that this segment isn’t fully explored yet and we are set to disrupt the space with our technology infrastructure. The beta version for the new arm is ready and we will be leveraging data from our existing business to set the ball rolling.
Last week, the Noida-based company had got Payment Bank License from the Reserve Bank of India. With this, Paytm will be able to drive its overall commitment to financial inclusion for the unbanked segment and modernize payment systems.
Paytm’s core business is payment, and inclusion of financial services and insurance make a lot of sense for the SAIF Partners backed venture. It’s worth noting that Paytm is only facilitating payment of installment (EMIs) and premium of insurance premium. The company is not aggregating insurance policies etc.
Users who visit Paytm platform for variety of reasons like utility bill payments, recharge (mobile, data and DTH) and shopping (via its marketplace) will not mind paying their loan and insurance premium installments via the company’s platform.
As of now, none of the horizontal digital commerce companies offer such services and it would be interesting to see whether other e-commerce majors will follow it or not. Currently, Policybazaar, Bankabazaar, Zibika among a few others operate in the insurance and EMIs loan payment space.