India’s preeminent Fintech company, Paytm and the country’s leading private bank HDFC Bank Ltd announced a strategic partnership for delivering financial solutions across payment gateway, point of sale (POS) machines and credit products including Paytm Postpaid, a Buy Now Pay Later (BNPL) service, Eazy EMI and Flexi Pay.
“The fusion of HDFC Bank’s network, products and credit appraisal capabilities and Patym’s technological platform will accelerate digital transformation in semi-urban and rural India while bringing more people into formal banking channels,” said the companies in a combined statement
The strategic partnership has been announced before the IPO of Paytm scheduled for later this year. Paytm is targeting to raise Rs 16,600 Crore via the listing. This will enable these two institutions to bring advancements in digital payments, providing loans and point of sale (POS) solutions.
In the first stage, the partnership will include a payment gateway and point-of-sale (POS) solutions for Indian business partners. HDFC Bank’s role would be of a payment partner, while Paytm tackle distribution and software.
Across India, HDFC Bank will manage merchant partnerships, to whom Paytm will provide its existing range of Android POS devices services. HDFC Bank salespersons will manage the sales of Paytm’s payment solutions in the market.
“Paytm’s reach in the offline and online merchant space and HDFC Bank’s retail influence will aim for dynamic growth in the payments space. Paytm has a history of launching innovative products that have made way for the adoption of retail payments among various merchant partners. This partnership aims to bring innovative products focusing on affordability,” said Renu Satti, COO, Offline Payments.
The collaboration is a significant shift from 2017 when HDFC Bank’s then-India Managing Director Aditya Puri stated that payment wallets such as Paytm had no future.
“As India’s largest issuing and acquiring bank, we have always endeavoured to personalise our offerings to customers-consumers, businesses and corporate houses. 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,” said Parag Rao, Group Head–Payments, Consumer Finance, Digital Banking & IT, HDFC Bank.
HDFC Bank SmartHub is a Do-It-Yourself platform that allows you to open your bank account on your own and helps you with a range of payment solutions to grow your business and accept cashless payments from their customers