Home  »  Banks  •  Business News

Exploring Partnerships Amidst Regulatory Challenges: HDFC Bank’s Engagement with Paytm

6th February, 2024| By Business Desk
HDFC Bank
HDFC Bank | Credit: Mint
  • HDFC Bank is actively engaged in discussions with its longstanding partner, Paytm, amidst regulatory challenges faced by the fintech giant in India.
  • Parag Rao, HDFC Bank’s country head for payments, confirms ongoing dialogue with Paytm, particularly in the acceptance and aggregator space.
  • Despite uncertainties, HDFC Bank observes increased traction for its payments app and merchant business following regulatory restrictions imposed on Paytm by the Reserve Bank of India (RBI).
  • HDFC Bank’s partnership with Paytm extends to the parent company, One97 Communications, distinct from Paytm Payments Bank, which is under regulatory scrutiny.
  • In addition to launching a revamped mobile app, HDFC Bank introduces four variants of credit cards for small businesses and considers a dedicated credit card for gig economy workers and freelancers.

HDFC Bank, India’s leading private sector lender, is currently engaged in discussions with its longstanding partner Paytm, amidst the regulatory challenges faced by the fintech giant. Parag Rao, the country head for payments at HDFC Bank, emphasized the ongoing dialogue with Paytm, highlighting their partnership in the acceptance and aggregator space. While acknowledging the uncertainty surrounding Paytm’s situation, Rao affirmed the bank’s stance of closely monitoring developments.

In response to inquiries regarding reports of Paytm seeking support from large banks, Rao reaffirmed the collaborative history between HDFC Bank and Paytm, particularly in the acceptance and aggregator segments. Despite the lack of clarity on the current circumstances, Rao reiterated the engagement between the two entities, indicating a cautious approach while observing the unfolding events.

Rao noted a noticeable surge in activity on HDFC Bank’s payments app and merchant business following the regulatory restrictions imposed on Paytm by the Reserve Bank of India (RBI). He attributed this uptick to market disruptions that prompt customers to explore alternative options, leading to increased traction for HDFC Bank’s offerings such as Fastag, prepaid cards, and sound boxes.

Clarifying HDFC Bank’s partnership structure with Paytm, Rao specified that the collaboration extends to the parent company One97 Communications, distinct from Paytm Payments Bank, which is currently under regulatory scrutiny. With the restrictions on Paytm slated to come into effect on February 29, HDFC Bank plans to closely monitor the situation over the ensuing two weeks.

Meanwhile, Rao announced HDFC Bank’s upcoming launch of a revamped mobile app within the next two months. The updated platform aims to enhance user experience by providing comprehensive services and guiding users to relevant offerings effectively. Additionally, the bank introduced four variants of credit cards tailored for small businesses, featuring varying joining fees, including an exclusive card with a joining fee of up to Rs 10,000.

Highlighting HDFC Bank’s track record in catering to small and medium businesses, Rao mentioned the existing base of over 3.5 million dedicated credit cards for this segment. Insights gleaned from this experience informed the development of the new credit card offerings. Furthermore, the bank is considering launching a dedicated credit card catering to gig economy workers and freelancers, with benefits encompassing access to co-working spaces and accounting packages.