Ahead of its IPO, fintech major Paytm and HDFC Bank on Monday announced that they have entered into a strategic partnership to build comprehensive solutions across payment gateway, point of sale machines, and credit products including Paytm Postpaid which is Buy Now Pay Later (BNPL) solution, Eazy EMI and Flexi Pay.
The partnership will aim to empower new businesses which have recently ventured online, and enable them to scale up.
The strategic partnership with the country’s largest private bank comes ahead of the proposed initial public offering (IPO) of Paytm, through which the company plans to raise Rs 16,600 crore before the end of the calendar year.
The first leg of the partnership will include a payment gateway and POS solutions for Indian merchant partners. HDFC Bank will be the payment partner, while Paytm will be the distribution and software partner.
HDFC Bank will drive merchant partnerships across India, to whom Paytm will offer its existing range of Android POS devices. The bank salespersons will start selling Paytm’s payment solutions in the market.
Paytm and HDFC Bank will also jointly launch a co-branded POS product in the retail segment, which Paytm will have the option to offer to its own customer base.
“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 coming together of HDFC Bank’s network, products, and credit appraisal capabilities and Paytm’s technological platform will accelerate digital transformation in semi-urban and rural India, while bringing more people into formal banking channels, the firms said in a joint statement.
“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 solutions is an integrated platform offering merchants a one-stop solution shop for all their business needs-payments, banking, lending and segment-specific business solutions.