Paytm Payments Bank – Things you need to know
Paytm started operations with the vision of changing the Indian Fintech scene for good at around 2010 with a simple website. Early 2013, the paytm team launched paytm wallet across IOS, Android, Windows and Blackberry platforms which kept on growing until becoming a huge means of survival for small retailers at the level of offline commerce transactions done during demonetization last December.
Yesterday, it just launched its biggest initiative to bring millions of unbanked Indians to the mainstream banking scene with the very first “Paytm Payments Bank” valued at 8bn$ as of today.
What is a Payments Bank?
Payments bank is a new banking model as envisioned by the Reserve Bank of India which enables users to deposit up to 1 Lakh INR/1550 USD in savings or current account while earning interests on the same(4% in case of Paytm payments bank) by following simple KYC procedures using Aadhar.
A payments bank can provide debit cards, mobile banking, and online banking but no financial products of themselves, but can partner with other major banks.
Right now there are only three payments bank in India, namely: Airtel Payments Bank, India Post Payments bank and Paytm Payments Bank
The Indian Fintech Scene:
The Indian fintech scene has witnessed a strong cash-flow in terms of investment from tier one VC firms and investors since early 2013 when smartphone penetration had just begun in India.
Apps like Freecharge, MobiKwik, PayUMoney, Airtel Money, LendingKart, OLA Money, Citrus Pay dominated handsets and users irrespective of their age or location. A total of 5bn$+ pumped across 150+ deals is an estimated number to have taken place from 2014 till date.
This phase also saw successful exits of Freecharge (acquired by Snapdeal/Paytm signed term sheet to buy Freecharge), PhonePe(acquired by Flipkart), CitrusPay(acquired by PayU for 130mn$) also for SAIF capitals, Reliance Capital and etc. from Paytm after the recent 2 rounds from Softbank (1.4Bn$) and Alibaba(500mn$).
2017 is going to be a lot more than that as investments are now being diversified across fintech sectors like virtual currencies, lending, credit score, tax filing, insurtech, robo advisory, remittances and etc.
The PayTM wallet IOS and Android App:
Paytm wallet’s all existing users would be automatically opted in for being listed with paytm bank and the ownership of operations would be transferred from “One97 Communications” to “Paytm Payments Bank” but the wallet balance and transfer process shall remain the same.
If a user wishes to open a Paytm bank savings/current account then necessary KYC formalities need to be met to avail Paytm Payments Bank’s full range of services like Debit Card, NEFT, IMPS, UPI transfer.
Even though right now the option for being a Paytm Payments Bank Customer is through invite only, in near future users will earn 4% interest for their deposits by being account holders with Paytm Payments Bank. Paytm is also expected to open up 31 physical branches by this year end to help bring more people into being financially included in all core aspects.
Get an invite at paytmpaymentsbank.com
With the accelerating adoption of fintech apps post the demonetization of currency notes in December, an endless array of possibilities emerge to reshape the Indian economy into a broader, much included, financially transparent and equally facilitative for everyone.
Airtel Payment’s bank offer a higher interest rate (7%), Indian Post and Payments Bank has been around for more than 10 years with an exclusive bondage of trust and presence among rural population, yet Paytm Payments bank is going to be a huge success because of its massive success of the original Paytm Wallet, which has become a household name now.
With bitcoin passing 2000$ mark and AWS partnering with DCG, this year is yet to witness big movement to take place across all fintech sectors especially around cryptocurrency apps, blockchain apps and peer to peer payment apps.