Paytm and HDFC Bank collaborates to offer financial solutions

Paytm and HDFC Bank has announced a strategic partnership to provide financial services to Indian consumers and merchants. This partnership will introduce new products in the areas of digital payments, lending, and point-of-sale (POS) solutions.

Speaking on the development, Bhavesh Gupta, CEO, Paytm Lending, said "This partnership will further strengthen the financial services ecosystem by bringing together our technology and digital solutions and HDFC Bank’s retail and credit prowess."

"Through this partnership, we will also be jointly delivering enhanced SmartHub solutions to the market," said Parag Rao, Group Head, Payments, Consumer Finance, Digital Banking and IT, HDFC Bank.

By combining both the companies' strengths in banking, lending, and digital payments, these two market leaders will drive innovative digital solutions for financial transformation in the country. HDFC Bank's network, products, and credit appraisal capabilities, combined with Paytm's technological platform, will accelerate digital transformation in semi-urban and rural areas.

Paytm and HDFC Bank will collaborate to develop comprehensive solutions across payment gateways, POS machines, and credit products, such as Paytm postpaid, which is a Buy Now Pay Later (BNPL) solution, Eazy EMI, and Flexi Pay, among other things.

This collaboration aims to empower new businesses that have recently gone online and help them scale up.

Paytm and HDFC Bank has teamed up to offer two broad POS services- Firstly, Paytm will offer its existing range of Android POS devices to merchants who partner with HDFC Bank across India. HDFC Bank's salespeople will begin selling Paytm's payment solutions in the market as a result of the partnership. The payment partner will be HDFC Bank, and the distribution and software partner will be Paytm.

Secondly, the finance firms will collaboratively launch a co-branded POS product in the retail space, which Paytm will be able to offer to its own customers.

Paytm claims 333 million users and 21 million merchants on its platform. The company plans to go public in October with an IPO worth Rs 16,600 crore. Paytm is currently India’s second most valuable internet company, with a market capitalization of $16 billion when it raised a billion dollars in November 2019 with the help of T Rowe Price, Discovery Capital, and D1 Capital.

While HDFC Bank is a major player in the payments ecosystem, with over 50 million credit and debit card customers and leadership in both credit card issuing and acquiring businesses. It has over two million merchant acceptance points and a 48 percent share of the merchant acquiring volume market.

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