HDFC Bank inks pact with Paytm to ramp up credit card issuance

To reclaim lost ground in the credit card market, HDFC Bank announced on Monday a partnership with top payments platform Paytm to begin selling co-branded plastics before the festive season begins.

According to an official release, the credit cards will be powered by Visa and will have features aimed at millennials, company owners, and retailers.
Paytm has more than 330 million users and 21 million merchants, while HDFC Bank has more than 5 million debit, credit, and prepaid cards and services 2 million merchants.

As a result of frequent outages, HDFC Bank, the largest private sector bank that also dominates the credit card industry, has been barred from issuing new credit cards for more than eight months. It detailed aggressive intentions to reclaim lost market share in as little as a year once the prohibition was lifted.

To meet its goal, the bank said it will focus on distribution partnerships, aiming to increase new credit card sales to 5 lakh per month by the end of the fiscal year, up from 3 lakh in November 2021.

Last month, HDFC Bank and Paytm launched a payments partnership. Paytm already has a partnership with Citi, through which co-branded credit cards are distributed. Citi is considering exiting its retail banking operations in the country.

The HDFC Bank-Paytm co-branded cards will be available next month, ahead of the festive season, when spending normally spikes, according to the statement, which also stated that a full suite of goods will be accessible by December.

Paytm’s merchant partners and India’s new-to-credit millennials will now be able to create a solid credit profile and have access to possibilities accessible in the formal sector, according to Bhavesh Gupta, the company’s chief executive.
Parag Rao, the group head of consumer finance at HDFC Bank, described it as an effort to encourage consumption to promote economic growth, noting that the bank is the leading player in both card issuing and merchant acquisition.