India’s largest private sector lender HDFC Bank is on a “wait and watch” mode with regard to the crises unfolding at fintech giant Paytm. It is evaluating “every situation” and will take a call on its partnership with Paytm for co-branded card, the bank’s head of payments and card business, Parag Rao, said on Tuesday.
“We are still waiting and watching and evaluating every situation as it comes, and will take an appropriate call depending on what happens,” Rao said at a press conference.
He was responding to a query on whether the bank’s co-branded credit card partnership with Paytm will continue. He clarified that the partnership is with Paytm parent One 97 Communications, and not with Paytm Payments Bank (PPB).
Rao’s comments came at a time when the Reserve Bank of India has imposed tough business restrictions on PPB, effectively ending the full suite of the entity’s services from February 29 onwards.
On whether the bank is open to acquire merchants and customers of PPB in one go, Rao said: “Paytm has been our partner over the years for our acceptance and aggregator businesses. Under current circumstances, we do not know much of what is happening. But, we are talking and waiting and watching to see how events develop.”
Rao said even as HDFC Bank partners with Paytm for certain products and services, it also competes with the fintech giant in the merchant acceptance and mobile application space. With the current negative commentary surrounding Paytm’s survival ability, Rao said there is a churn of customers, wherein they are moving their savings from Paytm.
“With everything that is happening in the ecosystem, a churn of customers is probably happening. Over the last week or so, we have seen significant traction for our PayZapp app and Vyappar or merchant app,” he said.
Rao said the bank’s new mobile application will be launched within a month or two. This application will have far better user experience and a host of new features which will enhance the usability of the application.
HDFC Bank on Tuesday also launched a number of business credit cards for small and medium enterprises (SME) owners and entrepreneurs.