The alliance between HDFC Bank and Paytm was first announced last month. To return to the top of the credit card segment, HDFC Bank announced a collaboration with Paytm on Monday to sell co-branded plastic ahead of the festive season.
According to an official statement, the credit cards will be powered by Visa and will include features aimed at millennials, business owners, and merchants.
HDFC Bank provides debit, credit, and prepaid cards to more than 5 million customers, as well as serving 2 million merchants. Paytm has over 330 million users and 21 million merchants.
In punishment for frequent outages, HDFC Bank, the largest private sector bank that is also the leading issuer of credit cards, was banned from issuing new cards for over 8 months. In the months following the lifting of the ban, it laid out aggressive plans to regain lost market share.
According to the bank, it will focus on distribution partnerships in order to realize its target of ramping up new credit card sales from 3 lakh a month in November 2021 to 5 lakh by end of the fiscal year 2022.
Paytm and HDFC Bank partnered on the payments front last month. Paytm already has a partnership with Citi whereby co-branded credit cards are issued. In the country, Citi looks to exit its retail banking operations.
The HDFC Bank-Paytm co-branded cards will launch next month, ahead of holiday shopping which typically results in a spike in spending, according to the statement, which added that a full suite of products will be available by December.
“With our technological capabilities, Paytm’s merchant partners and India’s new-to-credit millennials will now be able to build a healthy credit profile and gain access to opportunities available in the formal economy,” said Paytm Lending’s CEO, Bhavesh Gupta.
Group head of consumer finance at HDFC Bank Parag Rao described it as an attempt to encourage consumer spending to boost economic growth, adding that the bank is the leading issuer and acquirer of bank cards.
The bank’s stock was down 0.64% on the BSE at 1300 hours, versus a 0.20 percent correction in the benchmark.