It will work with Visa to roll out new payments and loyalty products, as well as make moves into new geographies.
Chris Clark, regional president, Asia Pacific, Visa, says: “This investment further reinforces our long-term commitment to India’s digital payments growth story.”
The deal, rumoured to be worth around $250 million at a valuation of $1.5 billion, is subject to statutory approvals.
Visa and Mastercard have seen their market share in India come under pressure from the country’s domestic payments network, RuPay.
Over the summer, Mastercard complained to the US government about the behaviour of Indian prime minister Narendra Modi, claiming that he is using nationalism to push RuPay.
The US giants have also been at odds with authorities over new rules which require information about transactions in India to be stored in the country.