Citibank has tied up with Indian fintech to launch co-branded credit cards that will enable the American bank to increase its penetration in India.

Under the this partnership, Citibank will be responsible for the card issuance and underwriting, while Paytm will provide digital interface and distribution services.

The credit card will provide a minimum of 1% cashback on all transactions which will be settled every month, besides other customer incentives.

Currently, Citi is one of the leading credit card issuers in the country. In March 2019, it issued over 2.7 million cards.  Paytm has 300 million users in the country.

Citi chief executive for global consumer banking Stephen Bird was quoted by Business Today as saying: “Within that population (of 300 million), even if we take one per cent of that population (for the card), that is 3 million customers. We think there is tremendous potential for growth of this partnership.”

The two firms have developed a tool through which Paytm can track a potential base of customers who will be interested in owning a credit card.

According to Paytm founder Vijay Shekar Sharma, up to 25 million customers in India have credit cards and expects a similar number to be potentially interested in owning one.

Credit card users will be charged a fee of INR500 annually for the card.

Last week, Paytm joined the network of payment giant Visa to issue Visa branded debit cards in India.