According to sources, in Paytm’s case, Aditya Birla Capital, a major partner, seems to have pulled out of the Postpaid partnership, leading to the company temporarily halting the service for users.
It has also halted new-sign-ins for users on the Postpaid service.
ET checked with multiple existing users of Paytm Postpaid, who complained on Wednesday morning that they could not see the Paytm Postpaid option while making payments to online and offline merchants.
It is still unclear whether Paytm is in talks with its existing non-banking finance company (NBFC) partners to relaunch the service. The company works with Hero Fincorp to power its personal loans vertical.
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The decision to temporarily halt the Postpaid product has affected certain portion of users of the service.
The fintech is expected to address analysts on Wednesday to share its outlook on the loan distribution business.
“We would like to put out very clearly here that this is purely speculative in nature. We would request you to not go ahead with this completely speculative news with the potential to create unnecessary worry among our shareholders. As a listed company, any update on any of our business statutorily has to be shared with the exchanges first. We would urge you to wait till our analyst call scheduled at 3.45 pm today,” said a Paytm spokesperson in response to ET’s queries.
For the quarter ended September 30, Paytm had disbursed Rs 9,010 crore worth of Postpaid loans to users.
On Tuesday, another beleaguered BNPL player, ZestMoney, also told its employees that it will be shutting down its operations by the end of the month, underscoring the stress on these players due to global macroeconomic conditions and continuous changes in the regulatory environment.
Aditya Birla Capital seems to be one of the major partners to have pulled out of a similar arrangement with ZestMoney, leading to ZestMoney’s management taking the call to shut shop.
ET had reported on November 17 that with the RBI increasing the risk weightage, fintech lenders are in the cross-fire, with the cost of capital expected to rise for NBFCs and fintechs alike.
Earlier this year, Paytm moderated its guidance for its personal loans category after seeing 100%-150% growth in previous years.
Addressing analysts on the company’s second quarter results in October, Paytm president and chief operating officer Bhavesh Gupta said that the company expects personal loans to grow 30-40% year-on-year.
This is also because Paytm saw early signs of delinquency and higher leverage in its personal loans vertical, Gupta said. The company has tapped only 1.1% of its monthly active user base of 95 million customers for personal loans.