Centre for Internet & Society

Offerings will be an incentive to companies already using Paytm e-wallet services to shift employees’ salary accounts to the bank, says Paytm Payments Bank CEO Renu Satti.

The article was published by Komal Gupta and Remya Nair was published in Livemint on January 24, 2018

Looking to tap the ready customer base of salary accounts, Paytm Payments Bank is trying to attract corporate entities with digital offerings such as food and gift wallets for their employees.

The bank has set a target of reaching a customer base of 500 million over the next 2-3 years, managing director and chief executive Renu Satti said in an interview. The bank claims to have 170 million customers, including those using the Paytm e-wallet.

Satti said the offerings will be an incentive to companies already using Paytm e-wallet services to shift employees’ salary accounts to the bank. Around 500 corporate entities are using e-wallet services.

“These corporate offerings will ensure better accountability and convenience for both the employers and employees,” she said, giving the example of food wallets which are automatically debited when a customer buys food, due to the tagging of merchants done at the back-end by Paytm.

“We even offer customisation to the extent of restricting usage of food wallet to specific merchants like office cafeterias, basis requirement,” Satti said.

Food vouchers and gift coupons have been typically issued in a physical form by corporate entities, earlier as paper coupons and now as prepaid cards.

Paytm Payments Bank offers customers the convenience of using their food and gift wallets through the app across the merchant base of Paytm, Satti said. “It doesn’t require any card, which also does away with issues such as loss of card and expiry of coupons, plus avail the benefits of cashback running on any Paytm merchant,” she added.

Last week, Paytm Payments Bank launched physical debit cards for its customers to facilitate account holders to withdraw cash from ATMs and make offline payments. Hitherto, the bank had been issuing virtual debit cards which could only be used for online payments.

The bank also plans to set up around 100,000 banking outlets across the country in the next one year to cater largely to under-banked rural areas.

The list of these outlets will be available on the bank’s website where the customer will be able to access a range of services including net banking, National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS) and Unified Payments Interface (UPI). There will be monetary incentives for these correspondents for every transaction they perform for the customer. These outlets could be a local kirana store or a chemist shop, Satti said.

“We will follow a stringent process to shortlist merchants. There will be screening, quality check, physical check to ensure whether the place is actually authorized to run a business,” she said.

The bank plans to onboard some from the existing merchant networks using Paytm wallets while others will be from areas where there is no Paytm presence as of now.

More than 6 million merchants are already a part of the Paytm ecosystem, primarily using wallet services.

Paytm Payments Bank was launched in November after receiving a payments bank license from RBI in January last year. Vijay Shekhar Sharma, founder of One97 Communications, holds the majority share in Paytm Payments Bank, with the rest being held by One97 Communications.

The bank currently has no minimum balance requirements and offers 4% interest on savings deposits. India has three other operational payment banks—Airtel Payments Bank, India Post Payments Bank and Fino Payments Bank. “The traditional banks that offer customized corporate services to its customers having a high amount of deposits would face competition from payments banks. They will have no other option but to offer those services to customers with deposits at the Payments bank limits, to stay relevant in the market,” said Udbhav Tiwari, programme manager at the Centre for Internet and Society, a Bengaluru-based think tank.

“Also, as a payment company, Paytm has data pertaining to the spending patterns of customers which help it be more competitive in the market,” he added.