Paytm Relaunches BNPL Product As Credit Line On UPI Service

Over a year after halting its buy-now-pay-later (BNPL) product Paytm Postpaid, the fintech major has relaunched the product as a credit line on UPI. Launched in partnership with Suryodaya Small Finance Bank, Paytm Postpaid will enable users to access instant short-term credit under a scheme titled “Spend Now, Pay Next Month”.

The service is being rolled out selectively to customers more likely to avail such credit, with broader expansion planned in the coming months. The facility offers up to 30 days of short-term credit.

Paytm wound down its Postpaid product in May 2024, citing a broader decline in asset quality across the industry. Initially launched as a BNPL product, Postpaid was later repositioned as small-ticket personal loans offering before being paused indefinitely in December 2023.

At the time, the company said it would not resume the business until the credit cycle played out. The company’s management has since maintained that BNPL remains a valuable offering and would return once the macro environment improves and lenders are more comfortable extending small-ticket credit. 

During Paytm’s Q1 earnings call, CEO Vijay Shekhar Sharma implied that BNPL was paused because lenders had become cautious about small-ticket loans (under INR 50,000). 

“I personally love the product, and I’m personally a champion of it… when the personal credit comes back, BNPL will come back. We totally believe that it will come back,” he added. 

He reiterated that BNPL was one of Paytm’s strongest non-linear growth levers, capable of driving outsized revenue and margin expansion compared to the steady growth of its payments business. 

The recasting of the product as a credit line on UPI offering suggests that the company feels that the market sentiment has improved. This also comes at a time when Paytm has turned profitable.

The fintech major posted a net profit of INR 122.5 Cr in Q1 FY26 against a loss of INR 840.1 Cr in the year-ago period. Operating revenue zoomed 28% YoY to INR 1,918 Cr during the quarter under review.  

Notably, the credit line on UPI offering is gaining traction among major UPI players. PhonePe launched such an offering in August 2024, while Flipkart’s super.money acquired BNPL startup BharatX to strengthen its credit-on-UPI play.

Shares of Paytm ended today’s trading session 0.84% lower at INR 1,221.65 on the BSE.