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The new card should help Paytm stay a step
ahead of rivals in the fiercely competitive digital payments
market in India where companies from Alphabet Inc-owned Google
to Walmart-owned PhonePe, are all scrambling to grab a piece of
the digital payments pie that is projected to grow to $500
billion by 2020, according to the Boston Consulting Group.
For Citi, it is a big opportunity to extend its retail presence
in India.
Even if only 1% of Paytm's over 300 million customers use the
new credit card, that's a huge number, Stephen Bird, Chief
Executive, Global Consumer Banking at Citi told reporters at a
news conference.
"We think there is a tremendous potential for growth of this
partnership," Bird added.
Paytm became a household name across India after New Delhi's
shock move to ban high-value currency notes late in 2016 led to
a cash crunch and boosted use of its electronic wallet.
Its parent One97 Communications counts Japan's SoftBank Group,
Alibaba and Berkshire Hathaway among its investors.
The Paytm First Card will offer 1 percent cashback on all
transactions, unlike reward points offered by most rival credit
cards in India.
"We understood that there is a set of the customer base or
customer needs that get fulfilled when you have a credit card or
card in the hand," said Vijay Shekhar Sharma, founder and CEO of
One97 Communications.
"That is why we had launched a debit card of our bank and today
we complete our offering with a credit card partnership with
Citibank."
Sharma, a self-made billionaire, said his firm is targeting
"urban aspirational users who are first-time credit users".
(Reporting by Sankalp Phartiyal; Editing by Keith Weir)
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