Citigroup is making a bigger push into India, partnering with Indian digital payments company Paytm to launch a credit card.
As Reuters reported on Tuesday (May 14), the Paytm First Card will give Indian consumers 1 percent cash back on all transactions. For Paytm, the new card is aimed at helping it stand out from its digital payment rivals, which are growing seemingly every day.
In addition to local players, U.S. tech companies including Google, Amazon and Walmart are trying to get a piece of the market. In April, Facebook announced that WhatsApp Pay is coming to India, which has more than 300 million users. Citing Boston Consulting Group, Reuters reported the payments market is expected to hit $500 billion by 2020.
Citigroup’s deal with Paytm is expected to extend its presence in the country.
Stephen Bird, chief executive of global consumer banking at Citi, said in a conference call that if just 1 percent of Paytm’s more than 300 million customers use the credit card, it would be a large number of customers. “We think there is a tremendous potential for growth of this partnership,” Bird said.
In an interview with Reuters, Vijay Shekhar Sharma, founder and CEO of Paytm parent One97 Communications said the company is completing its offering by launching the credit card with Citibank. “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,” the executive said.
Paytm became a huge player in the digital payments market back in 2016, after the Indian government removed high currency notes from the financial system to fight fraud and vowed to move the country toward digital payments. With the resulting cash crunch, Paytm became a household name. The company counts Alibaba, the Chinese eCommerce giant, as a backer.