HDFC Bank bullish on ‘buy now, pay later’: Parag Rao
India's largest private bank has issued over 400,000 credit-cards since the RBI lifted its ban on HDFC Bank last month.
The ‘Buy Now, Pay Later’ (BNPL) segment is important for HDFC Bank, said Parag Rao, HDFC Bank's Head – Payments, Consumer Finance, Digital Banking, and IT.
India's largest private bank said it has big plans, apart from its Flexipay product that allows its customers to buy now and pay later.
HDFC Bank's debit-cardholders are eligible for Flexipay, with a 15-day repayment period without any additional cost. Interest is charged after the period. It is available in merchant categories like travel, clothes, electronics, and home decor.
“We are bullish and have aggressive plans on BNPL," Rao said. "The next logical step for us would be to launch the same on our network,” he added.
The bank aims to issue half a million credit-cards per month, Rao said. In December last year, the Reserve Bank of India (RBI) had banned HDFC Bank from issuing new credit-cards as a penalty for its poor back-end technology systems and services.
Since the RBI lifted the embargo on August 17, HDFC Bank has issued over 400,000 credit-cards until September 21, 2021, according to Rao. Nearly 20 percent of HDFC credit-card customers comprise savings and current accountholders, he added, at a virtual press-conference on Wednesday.
For the next three or four quarters, the bank will focus on gaining back the incremental market share and increasing the value market-share of the company, he asserted. Towards this end, the bank has formulated four pillars.
One is to improve and add more value to the customers using the existing products. In this regard, it has re-launched three cards: HDFC Bank’s Millennia, MoneyBack+ and Freedom cards. Creating and co-creating new card products is part of its strategy to straddle every customer segment; be it for Bharat or India.
The second pillar is to launch in segments that the bank is still not present. Third, bring the strategic alliance and partnerships to bear. In the past few months, HDFC Bank has come out with partnerships and alliances with fintech ventures, such as Paytm, Mintoak, Virtuoso Infotech, and Borderless Softtech.
The fourth pillar is to digitise its back-end process. In June 2021, HDFC Bank launched its digital and enterprise factory. Parag said this has helped the bank to modernise its existing banking, and to roll out new digital products and services. In coming months, the bank will announce more launches and alliances, he added.
Edited by Kunal Talgeri