Tag: paytm

Credit card war hots up ahead of festive season; cos announce a slew of tie-ups, BFSI News, ET BFSI

Banking & Finance

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Consumers are set to get a flurry of new credit card offers as banks are stepping up on customer acquisitions. Banks are gearing up to grab a bigger share of the market which is set to grow as the economy opens up.

New card additions were the highest for ICICI at 655,000 during this fiscal while added 198,000 cards being the highest in the past 16 months.

HDFC Bank

HDFC Bank, on which RBI recently lifted a ban of issuing new credit cards, has announced a tie-up with leading payments company Paytm to start selling co-branded plastics before the onset of the festive season. The credit cards will be powered by Visa and will 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 bank which also leads the credit card segment, was banned from issuing new credit cards for over eight months as a penalty for frequent outages. After the lifting of the ban, it outlined aggressive plans to regain lost market share in up to a year.

The bank had said that it will focus on distribution partnerships to achieve its target, under which it envisages ramping up new credit card sales to 5 lakh a month by end of the fiscal from 3 lakh in November 2021.

HDFC Bank and Paytm had last month announced a tie-up on the payments side. Paytm already has a tie-up with foreign lender Citi under which co-branded credit cards are issued. Citi is looking to exit retail banking activities in the country.

The launch of the HDFC Bank-Paytm co-branded cards is slated for next month, ahead of the festive season which typically sees a spurt in spends, the statement said, adding a full suite of products will be available by December.

Yes Bank ties up with Visa

Yes Bank has tied up with Visa to issue credit cards to its customers on the payment platform, which includes a suite of nine credit card variants. The Yes Bank card issuances were hit after RBI had banned Mastercard from issuing cards.

“The transition has been achieved within a record time of less than 60 days, ensuring ease for customers across segments,” the bank said.

Yes Bank and RBL Bank were hit the most by the Mastercard ban as their entire card network was on it. RBL Bank had announced a tie-up with Visa the day after the curbs on Mastercard were announced and resumed issuing cards from September 15. Yes Bank’s Visa credit cards, announced today, will service all segments–consumer cards, business cards, and corporate cards across YES First, YES Premia and YES Prosperity.

AU Small Finance Bank

AU Small Finance Bank (SFB) has issued over 40,000 credit cards since its launch a few months back, and more than half of them are first time users. The Jaipur based lender said it is the first SFB to enter semi-urban and rural areas with its own credit cards. It also offers a special Altura plus credit card to empower women to experience a limitless living.

In future, the bank is also working on bringing out its limited-edition cards, featuring the bank’s brand ambassadors Aamir Khan and Kiara Advani.

“The forthcoming festive season will lend further support to the picked-up momentum in the spends and new customers sourcing. However, a possible Covid 3.0 remains a key risk. We continue to believe that Citi Bank’s exit from the credit cards business along with the domestic corporate loan recovery cycle yet to pick up, provides good growth opportunities for the credit cards business, supported by improving macro-conditions,’ Axis Securities said in a note.



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HDFC Bank, Paytm set to launch co-branded credit cards in Oct, BFSI News, ET BFSI

Banking & Finance

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HDFC Bank and Paytm have entered into a partnership to launch a range of credit cards, powered by global card network Visa.

The launch is planned for next month, amid the 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 products will be on offer by the end of December, the companies said in a joint press release.

The launch will mainly target millennials, business owners and merchants, and will introduce business credit cards for merchant partners from smaller cities.

The cards will be customised to meet demands of retail customers, from new-to-credit users to affluent users, and offer rewards and cashback, it 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.

This development comes after the Reserve Bank of India lifted its new credit card issuance ban on HDFC Bank, which was imposed for over eight months as a penalty for frequent technical glitches. After the ban was lifted, the bank said it will ‘come back with a bang’, and has aggressive plans to regain lost market share.

Currently, Paytm has a tie-up with global lender Citi, under which co-branded credit cards are issued.



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HDFC Bank, Paytm set to launch co-branded credit cards

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HDFC Bank and Paytm on Monday announced plans for launching a comprehensive range of credit cards powered by Visa.

“The partnership aims to provide one of the widest range of offerings across customer segments, with a special focus on millennials, business owners and merchants,” said a statement.

Customised cards

The credit cards will be customised to meet distinct needs of retail customers, from new-to-credit users to affluent users, and will offer one of the best-in-class rewards and cashback for users, it further said, adding that the new cards offering will also facilitate small business owners.

Also see: Banks geared for card tokenisation

The launch is planned in October 2021 to coincide with the festive season to tap into potentially higher consumer demand for credit card offers, EMIs and Buy Now Pay Later options, with the full suite of products to be on offer by the end of December 2021.

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Fintech start-up IppoPay raises $250,000 in pre-seed funding

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IppoPay, a Chennai-based fintech start-up that provides digital payment solutions to merchants in tier-2 and tier-3 cities, has raised $250,000 in pre-seed funding from early-stage investor Better Capital along with Prabhu Rangarajan (co-founder of M2P) and Sailesh Ramakrishnan (partner at Rocketship VC).

In a statement, the company said it intends to use the proceeds to reach 100,000 merchants and expand its suite of offerings.

IppoPay claims that its platform has recorded transactions worth ₹1,750 crore in over one crore transactions for about 5,000 merchants. IppoPay is currently partnered with YES Bank, Axis Bank, ICICI Bank and Paytm Bank.

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Macquarie Capital, BFSI News, ET BFSI

Banking & Finance

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Private lender HDFC Bank is expected to more than double its technology spends as it improves digital capabilities in line with global peers. The bank could also see rise in cost to income ratio by 3-4% as it looks to compete with tech companies.

“Currently technology spends as a % of opex is around 8-9%, this in our view, will double to 18-20% if management is going to significantly increase investments and is in line with some global peers,” said Suresh Ganapathy, associate director, Macquarie Capital. “Cost/Income ratio may go up from current 36% to 39-40%.”

Ganpathi added that the focus is to decouple monolithic legacy backend systems; improve digital capabilities and UI/UX (user interface), partner with Fintechs and enhance customer offerings.

Analysts are viewing the bank’s renewed focus on technology as a positive step in maintaining and possible improving their market leadership across payments, cards and various lines of businesses. Hiring also will be accordingly tailored to get more tech people giving them a conducive open working environment.

As per Macquarie’s sensitivity analysis, increase in tech expenditure and eventually cost-income ratio can impact its FY22-24E (estimated) earnings estimate by nearly 8%.

HDFC Bank recently partnered with India’s largest fintech company PayTM for payments, lending and point of sale solutions and are likely to get into more such partnerships with many Fintechs in future.

“The bank continues to be a leader in giving EMI-based products at the point of purchase outlets,” Ganapathy said. “When it comes to credit, the bank will be calling the shots and apart from their own strict underwriting criteria, the bank will also use additional surrogate data provided by the Fintechs.”



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Macquarie Capital, BFSI News, ET BFSI

Banking & Finance

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Private lender HDFC Bank is expected to more than double its technology spends as it improves digital capabilities in line with global peers. The bank could also see rise in cost to income ratio by 3-4% as it looks to compete with tech companies.

“Currently technology spends as a % of opex is around 8-9%, this in our view, will double to 18-20% if management is going to significantly increase investments and is in line with some global peers,” said Suresh Ganapathy, associate director, Macquarie Capital. “Cost/Income ratio may go up from current 36% to 39-40%.”

Ganpathi added that the focus is to decouple monolithic legacy backend systems; improve digital capabilities and UI/UX (user interface), partner with Fintechs and enhance customer offerings.

Analysts are viewing the bank’s renewed focus on technology as a positive step in maintaining and possible improving their market leadership across payments, cards and various lines of businesses. Hiring also will be accordingly tailored to get more tech people giving them a conducive open working environment.

As per Macquarie’s sensitivity analysis, increase in tech expenditure and eventually cost-income ratio can impact its FY22-24E (estimated) earnings estimate by nearly 8%.

HDFC Bank recently partnered with India’s largest fintech company PayTM for payments, lending and point of sale solutions and are likely to get into more such partnerships with many Fintechs in future.

“The bank continues to be a leader in giving EMI-based products at the point of purchase outlets,” Ganapathy said. “When it comes to credit, the bank will be calling the shots and apart from their own strict underwriting criteria, the bank will also use additional surrogate data provided by the Fintechs.”



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Macquarie Capital, BFSI News, ET BFSI

Banking & Finance

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Read More/Less


Private lender HDFC Bank is expected to more than double its technology spends as it improves digital capabilities in line with global peers. The bank could also see rise in cost to income ratio by 3-4% as it looks to compete with tech companies.

“Currently technology spends as a % of opex is around 8-9%, this in our view, will double to 18-20% if management is going to significantly increase investments and is in line with some global peers,” said Suresh Ganapathy, associate director, Macquarie Capital. “Cost/Income ratio may go up from current 36% to 39-40%.”

Ganpathi added that the focus is to decouple monolithic legacy backend systems; improve digital capabilities and UI/UX (user interface), partner with Fintechs and enhance customer offerings.

Analysts are viewing the bank’s renewed focus on technology as a positive step in maintaining and possible improving their market leadership across payments, cards and various lines of businesses. Hiring also will be accordingly tailored to get more tech people giving them a conducive open working environment.

As per Macquarie’s sensitivity analysis, increase in tech expenditure and eventually cost-income ratio can impact its FY22-24E (estimated) earnings estimate by nearly 8%.

HDFC Bank recently partnered with India’s largest fintech company PayTM for payments, lending and point of sale solutions and are likely to get into more such partnerships with many Fintechs in future.

“The bank continues to be a leader in giving EMI-based products at the point of purchase outlets,” Ganapathy said. “When it comes to credit, the bank will be calling the shots and apart from their own strict underwriting criteria, the bank will also use additional surrogate data provided by the Fintechs.”



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BEST pushes for e-payments to save environment, BFSI News, ET BFSI

Personal Finance

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MUMBAI: More than 31,000 electricity consumers in island city have switched to digital payments in the past two months, with a total number of such consumers going over 6.6 lakh on Thursday, announced BEST general manager Lokesh Chandra.

This is 63 per cent of the total consumer base in Mumbai and a paperless, e-payment system is good for the environment, he said.

“We provide a discount of Rs 120 annually (Rs 10 a month) to consumers across island city if they opted for e-bill. The response has been overwhelming and more than 31,000 opted for the scheme,” Chandra said.

He further said that soon, BEST consumers can walk into any SBI branch and pay the bill by cash or cheque.

“We are also encouraging digital payment in a big way. There is a discount of 0.25 per cent of the total bill max Rs 500 for making an online payment. This includes miBEST app, payment on www.bestundertaking.net, Net Banking, credit card, debit card, Paytm, BHIM, Google pay and Amazon pay etc,” he said.

Besides, there are special incentive schemes for consumers who pay digitally regularly and at the same time, opt for e-bills for at least a year.

Such consumers will be rewarded by way of drawing lottery, and winners will get attractive rewards, he said, adding that the list of winners will be announced this month.

“The initiative is not only environment friendly, but also ensures timely and reliably receipts of bills to consumers,” he said.

Nearly 40 per cent of consumers with a majority in slum areas will be a big challenge as they may take time to switch from paper bills to digital, but BEST wants to persuade them too.

The BEST spends Rs 7.66 per paper bill every month, and so giving a Rs 10 discount per bill every month means incurring losses of Rs 2.44 per bill. This comes to Rs 3 crore losses annually for all consumers.

“We are willing to bear the losses for a paperless system as it helps save our trees,” he added.



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Zomato | Paytm | IPO: What new age tech IPOs mean for the brokerage industry, BFSI News, ET BFSI

Personal Finance

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The Indian brokerage industry has had a very good run in the last one year with the stock market booming despite the ongoing Covid-19 crisis. The otherwise trying time saw the onset of two new strong trends in financial markets – the return of the retail investors and companies coming to the primary market with unprecedented force.

These two factors have kept the brokerage sector busy as well as thriving. On its part, broking companies improved their platforms to promote ease of trading with the adoption of technologies such as artificial intelligence (AI), lowered brokerage fees, and tweaked their offering to suit the needs of new investors.

All these efforts helped the brokerage industry bear fruits and be future ready for the trend that is to stay for a long term. Ratings agency CRISIL estimated broking revenue to have grown around 65-70% during the financial year 2020-21 as against about 7% growth to the previous fiscal. Although the revenue forecast seems dimmer for the current financial year and probably beyond, because of market and regulatory factors, there is no denying that the industry has entered one of its most exciting times.

Riding the IPO boom
What has also ushered in a phase of change for the industry is the launching of initial public offers (IPOs). According to PrimeDatabase, there were 69 public issues which raised Rs 74,707 crore in FY21 and so far, this fiscal, around 24 companies have raised as much as Rs 37,366 crore.

The stock market debut frenzy was triggered by food delivery app Zomato, which raised $1.3 billion from the primary market this year. The owners of fintech apps like Paytm are looking forward to the IPO. The $2 billion public issue is slated to be the largest IPO in India since the Coal India IPO in 2007.
Several other unicorns and interesting start-ups joining the fray include PolicyBazaar, MobiKwik Systems, Nykaa E-Retail, and Delhivery.

There are abundant instances when the IPO mania stretched beyond a point resulting in losses for the investors. Be it the IPO boom of 1992 or the one in 1999 or the IPO boom of 2006-08 which ended with the sub prime crisis.

Time for innovation
The IPO boom is expected to bring many more millennials to the stock market given the value they see in these services companies which are in insurance, food delivery, and ecommerce, things they use on an everyday basis. With the onset of the new-age investors, helped by increased internet penetration and disposable income, the brokerage industry will go through a sea change in terms of use of technology. Already, a new crop of brokerages such as Zerodha have been creating waves in the industry. Existing and traditional brokerage firms too have ensured that they are not left behind in upgrading themselves.

As the industry and its needs evolve, technological innovations will become all the more visible. The innovations will not be restricted to investors looking at the Indian market but also beyond into more matured and bigger markets in the West. Global investments will be another area that will keep brokerages on their toes in the year ahead.

Bumps that can be straightened out
There are opportunities for revenue growth and the brokerage industry is likely to face pressure from the new regulatory changes. Two key implementations that will impact revenue growth are the upfront margin requirement mandated by the Securities and Exchange Board of India from last year and the phased increase in peak margin requirements, which will go up to 100% by September 2021. So even if new client additions bring in more revenue, these requirements would dent full potential. If Sebi were to reconsider its decision on these policies, the brokerage industry would be able to ride high.

(The author, K K Maheshwari, is President at Association of National Exchanges Members of India (ANMI). The views are his own)



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RBI dashes hopes of big corporates eyeing retail payments space, BFSI News, ET BFSI

Banking & Finance

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The Reserve Bank of India has put on hold its plan to create National Umbrella Entities (NUE) and end dominance of the National Payments Council of Indias (NPCI) in the retail payments space due to data safety concerns, according to a report.

The recent data security breaches at fintech firms and a ban on foreign card firms has made the central bank rethink the NUE plan, according to the report.

In the race

Lured by the digital payments potential unleashed by the pandemic, six consortiums, including those led by Tata Group and Reliance Industries, had submitted applications to the central bank to set up a national payments infrastructure rivalling NPCI platform.

The other consortiums are led by Paytm, India Post and Fintech startup iserveU.

The bank consortium is led by Axis Bank and ICICI Bank, with 20% each and co-promoting an entity called MoPay. This consortium also has BillDesk, Pine Labs, Amazon and Visa with a 15% stake each.

A consortium led by Reliance Industries and Inbeam Avenue has also submitted its proposal for the entity in which Facebook and Google are set to hold minority stakes.

Tata Group has also applied for the NUE licence through its subsidiary Ferbine Payments. It will own 40% in the entity while Airtel Digital, Mastercard and Nabard will hold 10% each. Flipkart, through its subsidiary

FlipPay, and Naspers-backed PayU will own about 5% each in the Tata entity.

A Paytm led consortium has set up another prospective NUE called Foster Payments. Paytm entities are set to co-promote with Electronic Payment and Services (EPS) and will together pick up 50%. Ola Financial and Policybazaar along with IndusInd Bank may each pick less than 10% non-controlling stake in the NUE.

Non-bank lender Centrum Finance, Suryoday Small Finance Bank, data analytic platform Think360.ai and fintech Zeta are the remaining consortium players that will have partial stakes in the NUE.

Another consortium led by technology provider FSS, payment gateway RazorPay and India Post payments bank have also applied for the licence. The sixth consortium is led by start-up iserveU technology. ET couldn’t determine consortium partners of this NUE aspirant.

NUE licence

An NUE licence can help the entity gain greater autonomy in processing digital payments in India. That will help establish a firm presence in the financial services ecosystem through value-added lending and insurance services.

The RBI had last August issued guidelines for corporates to create for-profit NUEs with an aim to foster competition and “de-risk” India’s burgeoning digital payments ecosystem where much of the settlement burden has fallen on the non-profit NPCI over recent years.

What is NUE?

New Umbrella Entity (NUE) is the beginning of the Reserve Bank of India’s attempt to encourage private players to build digital space for retail payments. It will be a ‘for-profit’ digital platform and be allowed to charge fees for online transactions, unlike the existing system of NCPI. The new entity or entities will be able to earn interest from the float that customers maintain in their online shopping accounts. Currently, digital transactions are processed by the National Payments Corporation of India (NCPI), a non-profit, umbrella organisation backed by more than 50 retail banks. In operation since 2016, its Unified Payments Interface allows users to link their mobile phone numbers to their bank accounts. Reducing the concentration risk of digital transactions and expansion of the payments infrastructure are the key reasons for the initiative.



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