Paytm to unveil its first payments bank in October

Paytm to unveil its first payments bank in October

Aims at light physical infrastructure model

Paytm to unveil its first payments bank in October

 Paytm will open its first payments bank branch in October and it will have a light physical infrastructure model.

In an interaction with Deccan Herald, CEO of Paytm payments bank Shinjini Kumar said people have a wrong belief that since Paytm is setting up a bank, consumers can constantly access cash and help them converting digital money into cash. “Actually our endeavour is to make people use digital money and not to go for cash transactions. For that Paytm is working hard by roping in more merchants and users to our wallet so that the entire ecosystem is digitised,” she said.

The Reserve Bank of India (RBI) gave in-principle approval in August 2015 to 11 entities to open payments banks. The apex bank believes that the move will widen the reach of banking services and push the government’s goal of financial inclusion. Paytm Vice President Kumar Aditya said the company is rolling out an extensive merchant on boarding programme, where by taxis, autos, as well as, small and large shops can accept Paytm as a means of payment. “Small merchants can now accept digital payments with no cost to them as settlement is instant and there are no fees. Bengaluru is one of the cities that will see an extensive roll out in coming months and media is already saturated with the catchy advertisement,” he said.

Shinjini said the company has decided to open the first branch in mid October, and it will have five branches by the end of this year. “Our branches will have maximum 2-3 members and it will be mainly in the rural hinterland. We want to create a payment mechanism which will be easier and build on low physical infrastructure.”

The Paytm payments bank CEO said the company is investing around Rs 350 crore to begin the journey in the payments business. “We would like to make it as the second largest revenue stream of the parent company,” added Kumar.

She pointed out that Paytm founder Vijay’s goal is to address the most difficult problems by opening up branches in remote villages. “Our banking service will be simple, easy to handle, transparent and penalty-free. We want people to use their money for transactions than to be parked in our account,” he said. Kumar said the company will tackle two issues to make it hassle-free. “One is we have to spend more money in educating the people to use this. Also, for the KYC we are planning to depend on eKYC using the Aadhaar data,” she said. To another query, she said, Paytm payments account opening will happen within 10 minutes.

As per the vision statement, Paytm wants to have 500 million people on board as its payments bank users by 2020.