LIC appoints Paytm to handle its e-payments
E-payments: Life Insurance Corporation of India is an Indian government-owned insurance and investment corporation under the ownership of the Ministry of Finance Government of India. LIC has appointed Paytm to facilitate digital payments after association with another payment gateway earlier. While the insurance giant has sought a fresh contract as most of its payments shift to digital modes.
Moreover, the new contract requires a smoother payment process, a wider variety of payment options, and adding more players (banks, wallets, etc) in payment channels. As per sources, there were 17 payment platforms that had bid aggressively. Paytm’s ability to straddle multiple payment services worked in its favor as others were dominant in particular segments like UPI or cards.
On the other side, LIC has seen a surge in digital payments after the pandemic. The corporation does Rs. 60,000 crore of premium collections from the digital model which does not include the payment made through banks. While it sees around 8 crore digital transactions a number expected to go up sharply.
LIC had sought an end-to-end solution not just for premium payments. But for all types of collections including payments of collections by insurance agents. The mandate also involves the automation of some processes.
While Chief Economic Adviser (CEA) K V Subramanian on Saturday said the proposed initial public offering (IPO) by LIC could garner Rs. 1 lakh crore for the government. Subramanian, while speaking at a virtual conference by Jana Small Finance Bank, said the disinvestment target of Rs. 1.75 lakh crore for 2021-22 is actually a carryover of the Rs. 2.10 lakh crore target set for the fiscal ending March 31st, 2021. The government, concerning LIC’s listing, has already got amendments in the LIC Act passed through Finance Bill 2021 in Parliament earlier this week.