Stripe plans to enter India's payments market by acquiring a 30%-40% stake in SBI Payments, aiming to leverage its expertise and expand its presence amid regulatory discussions and a competitive landscape.
Global digital payments startup Stripe is looking to foray into the Indian payments ecosystem through a partnership with State Bank of India’s (SBI) payments subsidiary, SBI Payments Limited.
The US fintech giant is seeking to enter a joint venture with State Bank of India, aiming to acquire a significant stake in SBI Payments Ltd, according to a source.
Currently, SBI Payments is a joint venture between State Bank of India and Hitachi Payments Services Private Limited, with SBI holding a 74% stake and the remaining held by Hitachi. Stripe is keen on acquiring a 30%-40% stake held by SBI.
This strategic move is anticipated to be carried out through Stripe’s Indian subsidiary, Stripe India Private Limited, which obtained an RBI license to operate as an online payment aggregator in January 2024.
The payment aggregator framework introduced by the RBI in March 2020 mandates all payment gateway operators to obtain a license for acquiring merchants and implementing digital payment solutions.
While discussions are ongoing with the Reserve Bank of India regarding the same, reports claim that the regulator has provided feedback to the global payments major on certain matters related to risk management and data protection.
Stripe is actively addressing these aspects and will soon approach the regulator to secure approval for the investment in SBI Payments.
Founded in 2010, San-Francisco-based Stripe has grown from a single tool—code for developers to enable credit card payments on their site—to a comprehensive suite of billing, tax, and other fintech tools.
Last year, it raised $6.5 billion in funding at a $50 billion valuation from GIC, Goldman Sachs Asset and Wealth Management, and Temasek, among others. Globally, Stripe is one of the largest entities in the payments infrastructure sector, known for its strong presence in merchant acquisitions.
Partnering with SBI would provide Stripe with the scale needed to make a significant impact in the Indian payments market, which already hosts a variety of players.
The Indian payments market is highly competitive, with more than 20 startups having received approvals from the RBI to set up their payments aggregator operations just this year.
Since December last year, the RBI has approved PA applications or given in-principle approval to numerous companies, including Zoho, Juspay, Decentro, CRED, PayU, Enkash, Pine Labs, Amazon Pay, Innoviti, Razorpay, CC Avenue, Cashfree, Tata Pay, Google Pay, Infibeam Avenues, and Mswipe, among others.
Conclusion
Stripe’s entry into the Indian market through a partnership with SBI Payments marks a significant move for the global payments giant. By acquiring a substantial stake in SBI Payments, Stripe aims to leverage its technological expertise and global presence to tap into India’s rapidly growing digital payments ecosystem.
With ongoing discussions and regulatory compliance in process, Stripe is poised to make a substantial impact in the Indian market, enhancing its global footprint and competitive edge in the payments infrastructure sector