Stripe enters the Indian payments ecosystem

Global digital payments startup, Stripe, has partnered with SBI Payments Limited to enter the Indian payments ecosystem.

Specifically, Stripe intends to form a joint venture with State Bank of India and plans to acquire a significant stake in SBI Payments Ltd, according to Hindu Business Line. Currently, SBI Payments is a joint venture between State Bank of India and Hitachi Payments Services Private Limited, with SBI holding 74% of the shares and Hitachi holding the remaining shares. Stripe intends to acquire 30% to 40% stake from SBI.

The acquisition is expected to be completed through Stripe’s Indian subsidiary, Stripe India Private Limited, which received a license from the Reserve Bank of India (RBI) in January 2024 to operate as an online payments aggregator. The RBI Payment Aggregator Framework introduced in March 2020 makes it mandatory for all payment gateway operators to obtain licenses to acquire merchants and implement digital payment solutions.

Discussions with the RBI are ongoing and the regulator has reportedly provided feedback to Stripe on risk management and data protection issues. According to inc42.com, Stripe is working to address these concerns and plans to seek regulatory approval to invest in SBI Payments.

In 2024, over 20 startups received RBI approvals to launch payments aggregator operations. Since December, the RBI has approved or granted in-principle approval to companies such as Zoho, Juspay, Decentro, CRED, PayU, Enkash, Pine Labs, Amazon Pay, Innoviti, Razorpay, CC Avenue, Cashfree, Tata Pay, Google Pay, Infibeam Avenue and Mswipe .

More information about Strip

Founded in 2010 and headquartered in San Francisco, Stripe has evolved from offering developers a single tool for credit card payments to providing a comprehensive suite of fintech tools, including billing and tax solutions. In 2023, Stripe raised $6.5 billion at a $50 billion valuation from investors including GIC, Goldman Sachs Asset and Wealth Management, and Temasek.

In April 2024, Stripe revealed its decision to separate its payment services from its broader suite of financial offerings. Stripe has retained its position as the largest privately held company in the industry, but the rapidly evolving fintech landscape coupled with increasing competition has led Stripe to revise its strategy.

The decision to remove the payments service from its suite of financial offerings marks a departure from the company’s previous approach, where access to other services was dependent on the use of Stripe’s payment solutions. In addition to this change, the company has introduced several new Embedded Finance features and a new selection of AI tools.