HDFC Bank aims to grow its network of merchants within the bank’s payments business to 20 million in the next 3 years from around 2 million at present. On Wednesday, the country’s largest private bank announced that it had updated its Smart Hub, which is the banks’ payments ecosystem for merchants. As part of the upgraded Smart Hub platform, HDFC Bank will provide merchants a Khata or digital ledger, payment reminders, allow merchants to manage their inventory, make vendor payments, a billing software and the ability for merchants to market their product catalogue.

“To further deepen the penetration of digital forms of payment across India, it is important that the merchant network is empowered with the best range of solutions,” said Parag Rao, country head for payments, consumer finance, digital Banking and marketing, HDFC Bank. “We currently have 2 million merchants, approximately 1.5 million merchants have digital payments acceptance forms on the SmartHub app, while the rest have physical payments acceptance forms like Point-of-Sale machines. Some merchants are also institutional merchants and are on our payments gateway,” he said.

“When we go to the market to acquire merchants, we look at acquiring a relationship. So the product suite we offer to the merchant, from SmartHub 3.0, liabilities and assets, the cost of acquisition is actually a small fraction and is insignificant in the larger scheme of things. We are a full suite acquirer and net-net we have all the form factors for the merchants to use. So it is a combine of all form factors to provide a full suite of services,” Parag Rao.

The bank has partnered with Visa to offer merchants the ability to accept payments either online, on the mobile through the SmartHub app or through POS devices. It has integrated several digital payments platforms like the Unified Payments Interface, Bharat QR codes, Aadhaar Payments and SMS Payments in addition to debit or credit card payments.

The bank aims to cross-sell loans and credit cards through the platform and will allow merchants to provide their customers with ‘buy now pay later’ loans. “Buy now pay later will be an important driver of growth. This product helps the customer by providing financing at the time of buying goods through a structured equated-monthly-instalment product. Globally, we have seen such products help drive personal consumption expenditure,” Rao said.