It looks like Paytm will soon run its payment gateway business under a new entity. The fintech major has incorporated a new entity Paytm Payments Gateway Service Pvt Ltd for its payments gateway business. The new entity is set up with a paid-up capital of Rs 100 crore.
Until now, Paytm had been running its payment gateway services under One97 Communications. The hive off of the payment gateway business has come at a time when the company has been ramping up its offerings to make it more business-focused.
Last year, the firm had launched an ‘all-in-one payment gateway’ and ‘Paytm business solutions’ for small and medium businesses. Apart from infusing Rs 100 crore in the new entity, Paytm would also infuse $14 million in Paytm Money.
The fresh proceeds in the Varun Sridhar-led firm are coming after two months. Paytm had infused Rs 60 crore in the mutual fund and stockbroking platform in November. It’s worth noting that One97 Communications had announced a Rs 250 crore investment in Paytm Money in the next 12-18 months in July 2020.
Separately, the company’s board has passed a special resolution to invest $12 million into its subsidiary Paytm Insurance Broking in one or more tranches, regulatory filings show. The Noida-based company had secured a brokerage licence for its wholly-owned subsidiary Paytm Insurance Broking Private Limited in March last year.
Besides rolling out insurance products across two-wheelers, four-wheelers, health and life, the company would provide policy management and claims services for customers. It plans to leverage its 16 million-strong merchant partner base to sell its insurance portfolio.