In a bid to regain lost ground in the credit card segment, HDFC Bank on September 20 announced the commencement of sale of co-branded plastics ahead of the start of the festive season with leading payments company Paytm.
The credit cards will be powered by Visa and include offerings targeted at Millennials, business owners and merchants, an official statement said.
Paytm has a reach of over 330 million consumers and 21 million merchants, while HDFC Bank has over 5 million debit, credit and prepaid cards, and serves 2 million merchants through its offerings.
HDFC Bank, the largest private sector, which also leads the credit card segment, was banned from issuing new credit cards for more than eight months as a penalty for repeated outages. After lifting the ban, it outlined aggressive plans to recover lost market share in up to a year.
The bank had said it would focus on distribution partnerships to achieve its target, which envisages increasing new credit card sales to 5 lakh per month by the end of the financial year from 3 lakh in November 2021 .
HDFC Bank and Paytm had announced a tie-up on the payments side last month. Paytm already has tie-up with overseas lender Citi to issue co-branded credit cards. Citi is looking to exit retail banking activities in the country.
The HDFC Bank-Paytm co-branded cards will be launched next month, ahead of the festive season, which usually sees an uptick in spending, with a full suite of products available by December, the statement said.
Bhavesh Gupta, CEO, Paytm Lending said, “With our technological capabilities, Paytm’s merchant partners and India’s new-to-credit millennials will now be able to build a healthier credit profile and access opportunities available in the formal economy. “
HDFC Bank’s group head for consumer finance Parag Rao termed this as an effort to enable consumption to drive economic growth and said the bank is the largest player in both card issuance and merchant acquisition.
The bank’s stock was trading 0.64% down at ₹1,573.15 at 1300 hrs on the BSE, as against a correction of 0.20% on the benchmark.
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