Paytm and India’s largest private sector bank HDFC Bank have entered into a strategic partnership to launch co-branded products and deliver financial solutions across India.
This collaboration between the market leaders is set to accelerate digital transformation in semi-urban and rural India. By combining Paytm’s technological platform with HDFC Bank’s network, products and credit appraisal capabilities the partnership is set to introduce more people to formal banking channels.
As part of the deal, HDFC Bank and Paytm will develop solutions across payment gateways, POS (point-of-sale) machines, and credit products including Paytm’s postpaid and buy now pay later services, Flexi Pay, and Eazy EMI services among others.
HDFC Bank will be driving the merchant partnerships as per the deal to which Paytm will bid its existing range of Android POS devices. HDFC Bank will also be selling Paytm’s payment solutions in the market to drive merchant partnerships across the country. With this partnership, the market giants will also launch a co-branded POS product in the retail segment. However, Paytm will also have an option to market this product to its customer base.
According to Group Head- Payments, Digital Banking & IT, Consumer Finance, Parag Rao, HDFC Bank being the largest issuing and acquiring bank the endeavor has always been to deliver personalized offerings. With this alliance with Paytm, a leading payment wallet in the country they aim to deliver jointly enhanced SmartHub solutions in the market.
The SmartHub Solution is an integrated platform that offers a one stop shop that offers merchant solutions for all their business needs, banking, payments, lending and other specific business solutions.
Paytm has a good reach in both offline and online merchant space and teaming this with HDFC’s retail influence, the companies will be focusing on dynamic growth in the payments segment. With this tie up Paytm will also be focusing on ramping up its fintech services in the retail segment.
HDFC Bank’s tie up with Paytm brings about a big change for the bank when it’s then managing director Aditya Puri had said that payment wallets have no future in the country.
About the Market leaders
Paytm boasts of 21 million merchants and 333 million users in the country. This digital payments startup offers innovative digital products and services to consumers that allows seamless mobile payments from bank accounts, cards, and digital credit among others. The company was founded by Akshay Khanna and Vijay Shekhar Sharma in 2010. The company has recently filed a draft offer document with SEBI for an IPO as it aims to go public in November.
Headquartered in Mumbai, HDFC Bank is India’s largest private sector bank and maintains its leadership in both credit card issuance and acquiring businesses. It is the market leader in credit card business with a spend share of more than 27 percent. Being one of the strongest players in the payment ecosystem of the country it boasts of more than 2 million merchant acceptance points.