Global payment major Stripe and SBI in talks for JV

The global payment processing platform Stripe is gearing up to launch a joint venture (JV) with State Bank of India’s SBI Payments Limited.

The deal will be executed by Stripe India Private Limited, a subsidy of Stripe that was granted licence in January by the Reserve Bank of India (RBI) to function as an online payment aggregator.

While the division of stake is yet to be finalised between the two companies, Stripe has sought to be a major stakeholder, The Hindu reported quoting sources. A deal with the Indian banking giant SBI would mark a significant global expansion for Stripe.

The California-based Stripe is a $50 billion company and one of the leaders in the global payment infrastructure sector. The company’s celebrity investors include Tesla Motors CEO Elon Musk and PayPal co-founder Peter Thiel. Collaborating with SBI would open up the roads for the global major to seamlessly reach out to the B2B and B2C payments sector in India.

SBI Payments is a JV between State Bank of India and Hitachi Payment Services Private Limited. While SBI has 74 per cent stake in deal, Hitachi owns 26 per cent. News reports suggested Stripe is currently engaged in talks with the Reserve Bank Of India to seek around 30 to 40 per cent of the SBI stake. The international platform is also looking into aspects such as data security and risk management.

SBI Payments is one of the most profitable payment companies in India with more than 1.14 million PoS (Points of Sales) machines and 2.93 million merchant acceptance touch points, The Hindu said. The JV between Hitachi and SBI has a five-year term slated to end this year. It is nor clear yet if Hitachi, which props the JV with infrastructural support and technology, would retain investment after the entry of Stripe or choose to encash a portion of its stake.