Short-Term Credit: How Paytm Postpaid Works

Unexpected expenses have a way of showing up when your budget is already stretched. Maybe your salary is still a few days away, but an important payment needs to be made today. Or you need to make a purchase now and would rather pay for it when your next salary comes in.

This is where short-term credit can help.

Short-term credit gives you access to a limited amount of credit that you can use for eligible payments and repay within a relatively short period. Unlike long-term loans, it is designed for smaller, immediate spending needs with a shorter repayment timeline.

One example is Paytm Postpaid, a Buy Now, Pay Later facility that lets you make eligible merchant payments using a credit limit and repay the amount later.

What is short-term credit?

Short-term credit is credit that is meant to be repaid over a short period rather than across several months or years.

For example, imagine you have an unexpected expense at the end of the month, but your salary is due in a few days. Instead of postponing the payment, short-term credit can give you access to a credit limit that you can use for an eligible payment and repay later.

The key is to use it thoughtfully and keep track of your repayment date and applicable charges.

How does Paytm Postpaid work?

Paytm Postpaid provides a small, short-term credit limit that can be used for eligible merchant payments. The credit facility is provided by Suryoday Small Finance Bank, while Paytm provides the platform through which you can manage and use the credit.

Once your Paytm Postpaid account is set up, it appears as a payment option when you make an eligible payment.

You can use Paytm Postpaid for payments at stores and apps where Paytm Postpaid is accepted. It can be used for QR payments, online payments and certain payments within the Paytm app.

Here’s how it works:

1. Activate Paytm Postpaid

You can find the Paytm Postpaid option on the Paytm app. After you give the required consent, your credit availability is assessed.

2. Complete the required verification

You may need to complete KYC, including selfie and Aadhaar verification, as part of the signup process.

3. View your credit limit

Once the process is completed, your available credit limit will be shown. The maximum credit limit mentioned in the current product guidelines is ₹60,000.

4. Accept the offer and set up repayment

After accepting the offer, you need to complete the required AutoPay setup. This allows repayments to be collected automatically when they are due.

5. Set up your Paytm Postpaid PIN

Once your credit line is created and linked to your Paytm account, you set up a PIN for it.

6. Start using Paytm Postpaid

Once activated, Paytm Postpaid becomes available as a payment option wherever it is supported.

How long do you get to repay?

Paytm Postpaid currently offers a credit period of up to 45 days.

For instance, if you make a payment at the beginning of the month, you may have until the applicable due date in the following month to repay it.

The exact bill and repayment details applicable to you will be available in the Paytm app, so it is important to check your bill and due date and make your repayment on time.

Where can you use Paytm Postpaid?

Paytm Postpaid is designed for merchant payments, rather than person-to-person money transfers.

You can use it in places where Paytm Postpaid is accepted, including:

• Scanning and paying at supported UPI QR codes
• Paying online at websites or apps that accept Paytm UPI
• Making eligible recharges and bill payments on Paytm
• Making eligible bookings and other merchant payments through Paytm

It can also work with non-Paytm UPI QR codes, wherever Paytm Postpaid is supported.

One important distinction: Paytm Postpaid cannot be used to send money directly to a friend or another person. It is meant for person-to-merchant payments.

Can your Paytm Postpaid bill be converted into EMI?

Paytm Postpaid may offer a Bill to EMI option that allows certain users to convert their previous month’s bill into a 3- or 6-month EMI.

This option depends on factors such as usage patterns and timely repayment history and is not guaranteed.

If the option is available to you, you will see the relevant offer in the Paytm app.

Short-term credit vs. using your bank balance

The biggest difference is the source of the money being used for the payment.

With your regular Paytm UPI payment, the amount is debited from your linked bank account.

With Paytm Postpaid, an available credit limit can be used for an eligible payment, allowing you to pay now and repay later.

That can be useful when there is a temporary gap between when you need to make a payment and when you expect to have the money available. However, the amount still needs to be repaid, so it is important to use your credit limit responsibly.

When can short-term credit be useful?

Short-term credit can be useful when you have a temporary cash-flow gap rather than a long-term need for borrowing.

For example:

• Your salary is a few days away, but an important purchase cannot wait.
• An unexpected expense comes up towards the end of the month.
• You need to make an eligible merchant payment but want to manage the payment against your upcoming cash flow.

The important thing is to have a clear repayment plan before using credit.

A simple way to think about Paytm Postpaid

Think of Paytm Postpaid as a short-term credit facility that sits within your Paytm payment experience:

1. Get a credit limit 
2. Make an eligible payment 
3. Receive your bill
4. Repay by the due date

With a credit limit of up to ₹60,000 and a credit period of up to 45 days, Paytm Postpaid can help you manage short-term payment needs without having to wait for your next salary or cash inflow.

Ready when you need it

If you’re facing a temporary gap between when you need to pay and when you’ll have the money, Paytm Postpaid can give you access to short-term credit for eligible merchant payments.

Find Paytm Postpaid on the Paytm app to get started.