HDFC Bank and Paytm Tie-up

Paytm is an online platform founded by Vijay Shekhar Sharma in 2010 as a subsidiary company of One97 Communication. Nowadays Paytm avail services digital payment services, e-commerce and finance. Paytm is used for paying bills, booking services as well as used in store receiving payments from customers.

HDFC Bank under holding company Housing Development of Finance Corporation established in 1994. It is the 3rd largest company on Indian Stock Exchange with large market capital of INR 9,315.67 bn. HDFC Bank provides services like Wholesale banking, Retail banking, Loans on assets and goods or services, credit facilities, Investment banking, and Wealth management.

HDFC Bank with 50 million credit and debit cards, and more than 2 million merchant cards had maintained a great share of market. In FY20 August HDFC Bank started issuing 4, 00,000 lakh cards more than the average rate of issuing and willing to bring various credit products. On 2nd December 2020 to curb this RBI imposed ban as an Embargo to new issuance. Due to this the Bank saw a drop 240 basis point in market share of outstanding cards from 25.6% to 23.2%.

To regain the lost ground, HDFC Bank tied up with Paytm on 20th September 2021. As Paytm with the help of 330 million customers and more than 21 million merchant users can help HDFC to supply much more plastic cards in market. HDFC Bank will try to achieve its target of 5 lakh credit cards sales per month by the end of current fiscal year.

A Fintech strategic partnership where HDFC will be payment partner and Paytm will play role of distribution and software partner. They are willing to target merchant partners, from small town to big cities to enhance credit.

Recently, Paytm got approval for an IPO of INR18, 300 crore, this amount is divided in offer for sale and new fresh equity sales. Hence, tie of a digital payment site and bank will be a new turn. It will create a strengthened leadership position.

Thank you.

Regards,

AKASH RATHOD (Section B),

Kautilya,

IBS Mumbai.