Citibank and payments platform, Paytm, have ended their partnership for a co-branded credit card Paytm CITI Card, ahead of the merger of Citibank’s consumer banking business with Axis Bank.
Both Citibank and Paytm have written to cardholders informing them that the co-branded credit card will be shut down, and offering them other cards they could opt for.
Paytm in a marketing communication said, “Your Paytm Citi credit card account will close soon. Don’t worry, continue enjoying uninterrupted benefits with Paytm HDFC Bank credit card. Switch now at zero joining fees”.
“Our partnership with One97 Communication Ltd. (Paytm) for the co-brand Citi Paytm Credit Card has come to an end. In this regard, we are delighted to offer you the Citi Rewards Credit Card as a replacement to your Citi Paytm Credit Card, should you choose to consent for the same,” Citibank said in a note accessed by businessline.
For existing Citi Rewards Credit Card customers, the bank has offered to replace the Paytm Citi cards with Citi Cash Back Credit Card. It added that the consent to swap to another Citi-branded credit Card will also serve as consent for transfer of the cardholder’s banking relationship with Citibank to Axis Bank, it said.
Failure to consent, will lead to closure of the Citi Paytm credit card effective January 30, as Citi India will no longer be able to provide services on the Citi Paytm Credit Card, it said.
In March 2022, Axis Bank had announced acquiring Citigroup’s retail banking business in India for ₹12,325 crore, subject to requisite approvals. This comprised Citibank’s consumer business, including credit cards, retail banking, wealth management and consumer loans.
Post acquiring around 30 lakh unique Citibank customers, Axis Bank will have about 2.85 crore savings accounts, over 2.3 lakh Burgundy customers and 1.06 crore cards. It will also increase Axis Bank’s credit card customer base by 31 per cent with 25 lakh additional cards, making Axis Bank amongst the top three players in the Indian market, it had then said.
In terms of ending net receivables (ENR) for credit cards, the market share of Axis Bank will increase to 15.5 per cent from 11.8 per cent, with the ENR rising 57 per cent to ₹24,400 crore post the merger.
However, Citibank told businessline that the Citi-Paytm co-branded cards were outside the scope of the agreed transaction between Citibank and Axis Bank. “Since the Citi-Paytm co-brand agreement has formally ended, these card holders have been provided the choice to easily swap their cards…which will also transition seamlessly to Axis. This is a planned transition, with customers being provided multiple options for their to-be-closed cards,” a Citibank spokesperson said.
A spokesperson for Axis Bank said that the bank does not wish to comment separately on the development.
Paytm, in turn, has around 3,00,000 activated cards as of September 2022 with average retail monthly spends of $269 – $293 per active card. The company activated around 48,000 new cards in October 2022. The tie-up with Citibank reportedly ended in November 2022.