Paytm, the IPO-bound digital payments company, and HDFC Bank, India’s largest private-sector financial institution, officially confirmed a strategic collaboration to integrate comprehensive solutions across payment gateways, point of sale machines, as well as credit products, which include Paytm Postpaid, which is a Buy Now, Pay Later (BNPL) service, Eazy EMI, and Flexi Pay.
The two companies are collaborating to accelerate digital transformation in semi-urban and rural India by consolidating HDFC Bank’s retail products/network with Paytm’s technology platform. HDFC Bank’s salespersons will begin promoting Paytm’s payment services in the market as a byproduct of this collaboration. The payment partner will be HDFC Bank, whereas the distribution and software partner will be Paytm.
Second, Paytm and HDFC Bank will partner up to launch a co-branded point-of-sale (PoS) product in the retail space, with Paytm having the option to market it to its own merchants. The collaboration represents a significant shift for HDFC Bank since 2017 when its then-India Managing Director Aditya Puri remarked that payment wallets such as Paytm have no potential in the future.
According to Paytm Lending CEO Bhavesh Gupta, the collaboration would deepen the financial services landscape by integrating Paytm’s technology and digital solutions with HDFC Bank’s retail and credit expertise. While Parag Rao, Group Head Payments at HDFC Bank, explains, “Through this partnership, we will also be jointly delivering enhanced SmartHub solutions to the market. We believe that this is the start of a great partnership and the cumulative strength of both HDFC Bank and Paytm will help us strengthen our respective leadership positions.”
SmartHub services from HDFC Bank is a unified platform that provides merchants with a one-stop shop for all of their business operations, including payments, banking, lending, and segment-specific business solutions.
Renu Satti, COO, Offline Payments at Paytm also commented on the development saying, “Paytm has a history of launching innovative products that have made way for the adoption of retail payments among various merchant partners.”
HDFC Bank is a prominent player in the payments ecosystem, with over 50 million credit and debit card users and dominance in both credit card issuing and purchasing sectors. It also has over two million merchant acceptance points across India with a 48 percent market share of the merchant acquiring volume market.
Paytm on the other hand is among the country’s leading digital payment providers with 333 million active users and 21 million merchants onboard. The company is also planning to go public in October with an IPO to raise Rs 16,600 crore (~$3 billion).
