Paytm’s latest insurance buy entrenches its position as fintech leader driving financial inclusion for 500M Indians

Fintech giant Paytm’s latest acquisition of insurance firm Raheja QBE for $74 million portends a metamorphosis in the Indian financial services industry where the penetration of financial services and offerings continues to be very low, despite digitisation taking place at breakneck speed.   “At Paytm, we are on a mission to drive the financial inclusion of over 500 million Indians, and our acquisition of Raheja QBE is a significant step towards this goal,” Amit Nayyar, Paytm’s President, tells YourStory.

Bringing millions of underserved Indians into the folds of the mainstream economy has always been Paytm’s central mission – ever since the fintech startup and its adroit Founder and Chief Executive Officer Vijay Shekhar Sharma took the reins of India’s fintech revolution over a decade ago.

Over the past few years, India has emerged a leader in driving digital payments adoption among the masses, evolving from an online-only model to a complete 360-degree adoption of payments via mobile phones, mainly through wallets, Quick Response (QR) codes, United Payments Interface (UPI), and cards.   Still, insurance products continue to have one of the lowest penetration rates among financial services offerings. A major reason for the low penetration of formal financial services such as insurance, credit, and savings remains inaccessibility to financial institutions, especially for those living in rural and far-flung areas.

However, fintech has upended that by not only putting financial services offerings in the hands of people, regardless of their location, but also helping them sign on for such services using independent identity verification services and enabling them to tailor financial products to their needs.

“We have extensive plans to strengthen our position as a fintech leader by increasing our offerings in the financial services space, and our acquisition of Raheja QBE will enable us to build on our reach with our merchant partners and customers,” Amit says.

Amit Nayyar, President, Paytm

On July 6, Paytm announced it would buy all of Prism Johnson’s 51 percent stake and ASX-listed QBE’s 49 percent stake in Raheja QBE through QorQl Pvt Ltd, which is a technology company with majority shareholding of Vijay Shekhar Sharma and remaining held by Paytm’s parent company One97 Communications.

“Insurance (both life and general) is highly under-penetrated in India as compared to other countries. With Paytm’s reach, we have the unique advantage of taking insurance to the larger population of the country,” Amit says.  

To be sure, Paytm aims to give half a billion Indians access to a range of financial services offerings across savings, credit, protection, and wealth management, and its recent acquisition of Raheja QBE is one way it’s getting deeper into space, say analysts covering the fintech space.