HDFC Bank talking to Paytm and evaluating developments: Parag Rao

The largest private sector lender, HDFC Bank is talking and evaluating the developments with its long-standing partner Paytm, even as it has seen significant traction of its customers on its app post the Reserve Bank of India order on the payments bank, said Parag Rao, Group Head – Payments, Consumer Finance, Marketing, HDFC Bank.

“Paytm has been our partner over the years in our acceptance business. Under the current circumstances, we don’t know too much of what is happening but we are talking, sort of waiting and watching how the events develop in the next couple of weeks,” Rao said.

 

The Reserve Bank of India (RBI) on January 31 stopped Paytm Payments Bank from accepting fresh deposits and carrying out transactions from February 29, 2024, citing “persistent non-compliance” and “material supervisory concerns”.

RBI has asked Paytm PB to settle all pipeline transactions and nodal accounts to be completed by March 15, 2024, and no further transactions should be permitted thereafter. Paytm is in talks with many banks to shift the nodal accounts.

Rao said that in the last week they have seen significant traction of customers both on PayZapp and their merchant application -- Smart Hub Vyapar.

“We have been partners with them but we also compete with them. So, we are partnering and competing. In the last week or so we have seen significant traction of customers both on our PayZapp App and Vyapar, merchant app. We see that happening and in discussions, we are waiting, watching and evaluating, we will take a call accordingly,” Rao added.

Further, Rao added that HDFC Bank is planning to re-launch a mobile banking application in the next one to two months. The application has been developed post taking multiple levels of feedback. It is a new build and the bank will migrate to it soon.

“While there is still a separate app, but through one core app, you can do a link out and still go through if you want to do that. PayZapp will remain as a standalone app. But you can access PayZapp through the mobile banking app,” Rao noted.

Rao was speaking during HDFC Bank’s launch of a new business range of credit cards for the MSME segment customized for business owners, entrepreneurs, and freelancers. The credit cards will be available in 4 variants - BizFirst, BizGrow, BizPower, and BizBlack.

The business credit card range offers a best-in-class interest-free credit cycle of 55 days, savings on core business spends like utility bills, GST, income tax, vendor payments, business travel, and business productivity tools.

According to the press release of HDFC Bank, it is one of the largest facilitators of cashless payments with 5.30 crore debit cards and 2 crore credit cards as of January 2024.

He also added that the United Payments Interface (UPI) was the first place that HDFC Bank explored to enhance the capacity significantly. “We are amongst the largest banks in terms of the transactions which we have done. We are already capacitized for 10X of that in terms of infrastructure.”