Paytm's Partnership With Leading Banks Aligns With Its Ambition To Become The Largest Financial Distribution Platform

Paytm's partnership with major banks will potentially allow Paytm to offer more services, and possibly generate more revenue, by sharing profits with these financial institutions

Paytm is not new to the financial services domain, already offering lending services in collaboration with top banks and NBFCs directly through its app

Source : Paytm

Shifting away from its exclusive reliance on Paytm Payments Bank (PPBL), Paytm is expanding its business model and revenue opportunities by partnering with major banks in India. This development follows Paytm's approval by the National Payments Corporation of India (NPCI) as a Third Party App Provider (TPAP), enabling it to collaborate with leading banks such as State Bank of India, Axis Bank, HDFC Bank, and YES Bank. This will potentially allow Paytm to offer more services, and possibly generate more revenue, by sharing profits with these financial institutions.

This approach could help Paytm get more customers and boost its earnings going forward, the company said.

YES Securities has recently upgraded One 97 Communications Limited (OCL) to BUY for the first time since they started covering it from the time of its listing. The report said, "While both the Wallet and BNPL businesses are now under cloud, the past successes underline the competitive DNA of OCL as an organisation."

Paytm is not new to the financial services domain, already offering lending services in collaboration with top banks and NBFCs directly through its app. Its portfolio extends from insurance products to credit cards. It has opened an avenue for the company, indicating a strategic move to expand its offerings and significantly enhance user convenience.

"We are expanding our financial services distribution platform in partnership with leading institutions. Paytm is committed to creating an inclusive next-generation financial ecosystem for our users across the country,” said a Paytm spokesperson.

This step is different from Paytm's earlier focus on just working with PPBL. It opens up more chances for Paytm to work with major financial companies. The fintech firm said this move is part of Paytm's plan to add more types of services and strengthen its position in the market, starting a new phase in its growth.

YES Securities in its report said, 'As flagged earlier, OCL’s Wallet business is housed within Paytm Payments Bank (PPBL), which, in the current scheme of things, will see its revenue decline to near negligible. However, we note that, out of the rough run rate of Rs 60bn worth of revenue for the Payments business, the contribution of the Wallet had declined to about Rs 10bn. Hence, the reset, while damaging for OCL, will not have a particularly outsized impact.'