PAYTM DIGITAL BANK
India’s leading mobile payments company Paytm has declared that it has formally received authorization from the Reserve Bank of India (RBI) to launch a Paytm digital bank.
The mission has been a long-time coming for Paytm founder and CEO Vijay Shekhar Sharma, who today confirmed that he will “take a full-time executive role” in the venture. He didn’t provide a timeframe for the lift-off, but local media conveyed the bank could be introduced in just 30-60 days.
The development of Paytm digital Bank mirrors Alibaba and Ant Financial’s own course in China, where it is one of a number of top internet corporations to expand into financial services and banking.
Alibaba’s MYbank derived online in the summer of 2015 with the aim of helping those who are disenfranchised from the traditional banking system, and there’s very much the same objective of Paytm.
“At Paytm online Bank, our goal is to build a new business model in banking business, focussed on bringing financial services to 100’s of millions of underserved or un-served Indians,” Sharma wrote in a blog post. “With power of technology and innovation-at-scale, we goal to become a benchmark in world of banking.”
In a meeting in December, Sharma told TechCrunch that Paytm would lead on Ant Financial and Alibaba for its experiences in China, but it would plan its own way.
“Our Paytm digital bank is a very Indian affair,” he said. “But at the same opinion the learning’s of their ecosystem in China tell us what we should do.”
Rather than disrupting the status quo, Paytm wants to make banking more available. Sharma said Paytm will work with traditional banks “to offer loans for share data and lending.” He positioned Paytm Payments Bank as a more accessible option for new customers, much like a approachable funnel for customers, with a specific focus on renovating the passbook and other systems for the digital era.
His determined longterm goal is for the Paytm digital bank to support half a billion people in India. Paytm is reportedly firstly targeting 200 million banking and mobile wallet accounts within the following year.
“In India, there are only 200-300 million people with banking services,” Sharma added. “We should get aggressive on them then add services like wealth managing, lending in partnership with current players.
“It’s about new customers who haven’t been worried with banking before and showing that there’s a business model based on trades not just wealth managing.”
Paytm had a breakout 2016, with its valuation rising to nearly $5 billion.
Already India’s best mobile banking service, it was the major benefactor of the Indian government’s demonetization program — which saw 1,000 INR and 500 INR notes recalled — which spurred wider acceptance among less traditional customers, including some key demographics that its Paytm digital bank will surely aim.
Earlier to the program, Paytm claimed some 135 million digital wallets in practice, which, while a small number considering India’s billion-plus population, was double its nearest contestant and some 75 percent of all the country’s current digital wallets. Demonetization saw offline transactions jump from being just 15 percent of its volumes to 65 percent. With 12 days, Paytm had got seven million transaction — $17.5 million in volume — per day. In an end-of-year wrap, the corporation said it had 177 million wallets by the end of December 2016.