Stripe enters the Indian payments ecosystem: what are the three-way payments in India

Global digital payments startup Stripe is planning to enter the Indian payments ecosystem in partnership with SBI Payments Ltd.

Stripe plans to set up a joint venture with State Bank of India and seeks to acquire a significant stake in SBI Payments Ltd, reports Hindu Business Line. Currently, SBI Payments is a joint venture between State Bank of India and Hitachi Payment Services Private Limited, with State Bank of India holding a stake of 74% and Hitachi holding the rest.Stripe is looking to acquire a stake of 30% to 40% in SBI.

The acquisition is expected to be made through Stripe's subsidiary in India, Stripe India Private Limited, which was granted an online payment aggregator licence by the Reserve Bank of India (RBI) in January 2024.The Payment Aggregator Framework launched by the RBI in March 2020 requires all payment gateway operators to be licensed to acquire merchants and implement digital payment solutions.

Stripe is currently in discussions with RBI and the regulator has reportedly provided feedback to Stripe on risk management and data protection issues. According to inc42.com, Stripe is working on these issues and plans to seek regulatory approval for its investment in SBI payments.

As of 2024, more than 20 startups have been approved by RBI for payment aggregation services. Since December last year, RBI has approved or given in-principle approval to 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.

More information about Stripe:

Founded in 2010 and headquartered in San Francisco, the company has grown from a single-code tool that initially supported developers processing credit card payments to a company that offers a complete suite of fintech tools, including billing and tax solutions.2023, Stripe raised $6.5bn from investors such as GIC, Goldman Sachs Asset & Wealth Management and Temasek, valuing the company at US$50bn.

In April 2024, Stripe announced that it was divesting its payment services from its broader financial offerings. Whilst Stripe retains its position as the largest privately owned company in the sector, rapid growth and increased competition in the fintech sector has prompted Stripe to adjust its strategy.

The decision to remove payments services from the fintech suite marks a departure from the way it previously had to use Stripe Payments solutions for other services. In addition to this change, the company has introduced a number of new embedded financial features as well as a range of new AI tools.