Paytm, HDFC Bank Join Forces To Provide Loans, Payment Solutions & More
Paytm and HDFC Bank are coming together to provide financial solutions to end consumers and merchants across India.
Contribution To Small Businesses’ Success
Both intend to provide “innovative digital lending and payment solutions for consumers and merchants alike”, says Bhavesh Gupta, chief executive officer, Paytm Lending.
He further said that the partnership “will strengthen the financial services ecosystem.”
It will do so by utilising HDFC Bank’s network, products, and credit appraisal capabilities and Paytm’s platform to bring about digital transformation in semi urban and rural India.
This fusion will also help bring more people into formal banking channels.
Significance Of Partnership
This strategic partnership comes ahead of Paytm’s IPO.
Through the IPO, the fintech major aims to raise Rs 16,600 crore before the end of the calendar year.
The partnership also marks a change in sentiment from when then India Managing Director of HDFC Bank Aditya Puri said back in 2017 that digital wallets like Paytm “have no future.”
Two Major Offerings
India’s largest private sector bank HDFC and Paytm will offer comprehensive solutions across payment gateways, POS machines and credit products, including Paytm Postpaid, which is a Buy Now Pay Later (BNPL) solution, Eazy EMI and Flexi Pay.
Through this, new businesses turning online will be empowered to scale up.
From the tie up, one can expect 2 major PoS offerings:
One- HDFC Bank will help with merchant partnerships to which Paytm will offer its existing range of Android POS devices.
Here, the sale of the devices will make Paytm the distribution and software partner with the bank being the payment partner.
Two- both will jointly launch a co-branded PoS product in the retail segment.
Paytm can choose to offer this product to its own customer base.
Utilising Large Customer Bases
The partnership will leverage Paytm’s presence in the offline and online merchant space and HDFC Bank’s retail influence.
Paytm has 333 million users and 21 million merchants on its platform.
HDFC Bank has over 50 million credit and debit card customers.
Paytm has an advantage of launching innovative products which has helped adoption of retail payments among various merchant partners.
Both will aim for “dynamic growth in the payments space” by offering affordable and “innovative” products.
Parag Rao, group head, payments, consumer finance, digital banking, and IT, HDFC Bank expressed that the joint launch of an “enhanced SmartHub solutions” would mark the beginning of a “great partnership.”
HDFC Bank SmartHub solutions is an integrated platform which offers merchants a one stop solution destination for their business needs such as payments, banking, lending and segment specific business solutions.
Rao added that the “cumulative strength” of both entities will help both strengthen their respective leadership positions.