The Indian government’s Life Insurance Corporation of India (LIC) has chosen local payments startup Paytm out of 17 competitors to facilitate digital payments for the country’s largest insurance company, according to Times of India, citing sources.
LIC had previously teamed with another payments business, but since most of the firm’s payments are digital, the state-owned insurance carrier — known as a Public Sector Undertaking (PSU) — decided to seek out a company that could provide an end-to-end solution.
The new agreement with Paytm requires it to provide seamless processing, more options and a wider variety of players, like wallets and banks. Paytm's ability to work across multiple payment services beyond a specific segment, such as UPIs or cards, worked in its favor to seal the LIC deal, according to Times of India.
Like other businesses across India and around the globe, LIC has seen an acceleration of electronic transactions since COVID-19 gripped the region. The PSU insurer now gets roughly Rs 60,000 crore in digital payments for premiums, not including those made via banks. Additionally, the PSU gets about 8 crore in digital transactions, a number that is expected to escalate.
Paytm reported in March that its monthly transaction volume in February hit 1.2 billion. The Indian payments firm also partnered with Ola and IndusInd Bank to seek a new umbrella entity (NUE) license from the Reserve Bank of India, a move that would help Paytm establish its own national payment network. The firm said it facilitates digital payments in 500,000 villages and provides training to more than two million merchants.
In an interview with PYMNTS, Paytm President Madhur Deora said the goal is to streamline payments for everything from rides to food directly in the Paytm app, and to “build a hub [to] manage their life issues.”