HDFC Bank in a press release on 20th September announced its plan to launch co-branded credit cards in partnership with Paytm. The bank will launch both consumer as well as business credit cards. These co-branded cards will be powered by the Visa payment network and cater to a wide array of customer segments with a special focus on millennials, business owners and merchants.
The launch of these co-branded credit cards is planned in October to coincide with the festive season to tap into potentially higher consumer demand for credit card offers, EMIs and Buy Now Pay Later options. The full suite of the Paytm co-branded credit cards will however be launched by the end of December 2021.
With over 33 crore customers, Paytm, one of India’s leading mobile payment apps and e-wallets, has a substantial user base even in tier-2 and tier-3 cities. With this collaboration, HDFC and Paytm target a deeper credit card penetration amongst small and medium-sized merchants and digital-first millennials in tier-1 and tier-2 markets.
Under this partnership, HDFC Bank will launch business credit cards offering a host of benefits to partner merchants leveraging Paytm’s large merchant user base, particularly in small cities and towns in the country. The bank will also be launching consumer credit cards offering cashbacks and a host of other benefits targeted at millennials including prospective first-time cardholders. The cards will not only enable new to credit millennials build a healthy credit profile, but are also purported to facilitate accelerated adoption of digitization in the country.
Paytm initially launched co-branded credit cards with Citibank which were later withdrawn, then, partnered with SBI Card for co-branded offerings. Currently, Paytm has two co-branded cards in the market in partnership with SBI Card- Paytm SBI Card and Paytm SBI Card SELECT. However, this is the first time that Paytm will be launching business credit cards catering to the large potential customer base of its partner merchants.
HDFC Bank in an earlier press release made public its plans to regain the customer base it had lost due to RBI imposed ban on issuance of new credit cards. The bank said it had over 20 initiatives planned to be launched in the next 6 to 9 months including the launch of new co-branded cards. With this announcement of co-branded offerings in partnership with Paytm, HDFC has started the execution of its strategy. It is worth noting that HDFC Bank, as of now, is not allowed to launch new credit cards in the market. However, given this announcement, we expect a formal RBI nod to new digital launches very soon.