Indian banks: How They Are Partnering With the Startup Community, Part I

Indian banks are exhibiting a willingness to transform themselves by working with the FinTech ecosystem. They have adopted different ways to work with the new global FinTech (ecosystem) and those initiatives largely fall into two buckets: internal programs and open innovation initiatives. There are various formats and ways of working with startups. This article focuses on how large Indian banks have adapted to the evolving FinTech landscape.


HDFC bank has launched a host of initiatives cutting across mobile banking and payments.

Partnerships with startups:

-HDFC recently partnered with a Bangalore-based startup called Tone Tag to provide phone-based proximity payment services to its customers. It doesn’t require special handsets or any new acceptance device.

-Earlier, it had tied up with Chillr—an app-based payments platform which transfers funds from account to account without having to fill in any account numbers or bank codes. HDFC Bank is taking Chillr towards merchant payments by getting onboard shopkeepers who do not have a POS terminal. The customer can pay by using the Chillr app to scan a QR code generated by the merchant.

-In 2012, the bank had partnered with Movida to launch a mobile payment service in India. The service allowed HDFC Bank customers to pay bills, top up prepaid airtime and buy tickets from their mobile phone and was designed to operate across all mobile networks using any Visa or non-Visa branded payment account.

Startup contest:

HDFC bank conducted its first ever Digital innovation summit through which the bank selected five startups. The startups include Senseforth Technologies (AI customer response), NotifyVisitors (marketing and customer engagement company), Safe 2 Pay (point-of-sale-free payment system), Bugclipper (an in-app feedback tool) and Taptis Technology (a biometric payment company). The engagement is strictly solution-led, and the bank will not put any money in the businesses. Currently, investment is not on the agenda and the bank is working that out with the companies


Last year, HDFC Bank made an investment in, an online new and used car dealer. The partnership is expected to boost the bank’s auto loan portfolio. The bank is already the market leader with 35% of the market share in this segment.

Axis Bank

Axis Bank has also shown intent to partner with third-party providers. The bank partnered with Fastacash and Vayana in the last year.

Partnerships with startups:

-Axis bank partnered with Vayana Network to launch Invoice to Payment, an end-to-end digital invoicing and payment solution. The solution aims to simplify B2B payments in India which is estimated at over $95 billion annually. It offers digital invoicing, electronic workflow approval and instant payment processing for businesses in India.

-Axis Bank launched Ping Pay service, a unique multi-social payment app in partnership with Fastacash (a Singapore-based venture capital-backed firm) that enables value transfers like money, airtime, coupons, etc. Ping Pay is bank-agnostic. Smartphone users would be able to transfer funds to even non-Axis Bank account holders.

-Axis Bank also partnered with Paynear (mPay), to offer complete end-to-end merchant-centric mobile POS across multiple cities in India.

Virtual hackathon:

Axis bank is looking to build strong digital banking capabilities and had sought NASSCOM's partnership. Axis Bank and NASSCOM jointly hosted a virtual hackathon challenge last year. Through this, the bank aimed at identifying developers and designers who could gamify financial technology solutions using Axis Bank's digital platforms/APIs on the mobile channel. The bank selected three winners from the contest. In a later stage, the bank intended to get into service contracts with one or more of the companies selected; however, the Intellectual property created through the hackathon was retained by the bank.

Investment in startups:

Axis Bank has also invested in mobile POS startup Mswipe and has partnered with them for merchant acquisition.


ICICI Bank has also shown intent in virtual appathons. Its focus has been on emerging startups and ideas wherein the IP can remain with the Bank.

Partnerships with startups:

ICICI Bank has partnered with Paytm, India’s largest mobile payment firm (backed by Alibaba Group) to launch virtual prepaid cards. The prepaid card will be a co-branded card and will be linked to a user’s Paytm wallet that can be used to pay for purchases both online and offline. The bank has also partnered with Alibaba in India to offer SME credit to its resellers onboard.

Partnership with educational Institutions:

In September 2015, ICICI bank tied up with 22 educational institutions to fund ideas of students. The bank has partnered with top-tier institutes including IIT Delhi, Birla Institute of Technology, Mesra; IIT Hyderabad and PEC Chandigarh. During the initial period, the startups enjoy exclusive rights to conduct business with ICICI. Over a period of time, the bank can permit these startups to market their products to other organizations. The IP for the product would stay with ICICI bank for an initial period of three years.

Virtual appathon:

Very recently, ICICI Bank launched its virtual app development challenge ICICI Appathon, inviting the developer community and technology companies, startups and technopreneurs to help create the next generation of banking applications on mobile. As part of the program, the bank offered 50 plus APIs including the APIs from Visa and NPCI. The top three winners will also be entitled to prizes from a pool of over Rs. 20 lakh with a potential engagement opportunity with ICICI Bank.

State Bank of India

SBI has partnered with a variety of players mostly to augment its loan portfolio in the country.


-In March this year, SBI tied up with taxi-aggregator Uber to provide instant vehicle finance to driver-partners on the latter’s platform.

-In July last year, SBI partnered with BankBazaar, an online financial product aggregator. Through this partnership, SBI aimed at creating an online platform for home buyers. The online platform makes the mortgage loan application process easier. Also, this platform will generate leads, provide door-step delivery and speed up the response time for SBI.

-Likewise, last year, the bank also partnered with Snapdeal to offer SME credit to resellers on the latter’s platform. Snapdeal has created a new real-time analytics tool with SBI, through which they can assign a credit score to all sellers on its platform. Previously, Snapdeal had lent over INR 250 Crore to more than 1,000 sellers through its Capital Assist Program and now, after partnering with SBI, it is targeting to disburse a loan amount of INR 1,000 Crore to SMEs.

Incubators and investment:

SBI plans to incubate startups in the FinTech space. As part of the initiative, the bank will collaborate to encourage banking solutions in FinTech. The bank is expected to provide physical infrastructure in its branches for startups. The bank has neither invested in any startup yet nor is in talks with any, according to a company official. However, it is learned that the chairman of SBI had visited Bangalore early this year to meet founders of startups.



-YES BANK very recently partnered with Bangalore-based Ultracash Technologies to launch payments processing through sound waves. Ultracash utilizes a patent-pending technology where payment data is securely transferred from one device to the other using unique ultra-high frequency sound waves. This technology ensures that Ultracash’s Tap and Pay works on all devices and doesn’t need any special hardware to make the payment and there is no need for special NFC chips.

-YES BANK partnered with Taisys Technologies (Taiwan) and NPCI to develop a platform which will issue a mobile banking SIM aiming to increase financial inclusion in the country. Through the collaboration, mobile phone users can transfer funds, pay through wallets, make payments to merchants and value-added services across all mobile devices including feature phones. Taisys will be integrating its m-banking platform with YES BANK’s domestic remittance service, YES BANK Money.-

-It’s worth noting that in 2013, YES BANK had tied up with TimesofMoney to launch its own online remittance solution called YES Remit, allowing non-resident Indians (NRIs) to send money to any YES BANK account or other bank accounts in India.

Center of excellence and virtual incubators:

-YES BANK has signed an agreement with T-Hub, India’s largest incubator for startups to set up a center of excellence for FinTech startups. YES Bank will offer its various products, payment gateways and open APIs to the startup community to build futuristic products. YES BANK is expected to mentor the FinTech startups by offering subject matter expertise, intelligence and knowledge-driven financial solutions. Apart from FinTech, YES BANK will also work closely with startups in segments such as AgriTech, healthcare, e-commerce, etc.

-Late last year, YES BANK launched a FinTech app store in India in partnership with iSPIRT. Through this partnership, iSPIRT opened a FinTech app store for Indian startups in the FinTech space. The mutual understanding will enable both the entities to utilize each other’s strengths and willingness to support startups. iSPIRT will work towards mentoring Indian FinTech startups and guide them through a partnership with YES BANK. In addition, YES BANK will offer its various products and payment gateways to assist the startups to commence operations effortlessly.