The payments bank industry has sought greater flexibility in pricing certain services to offset the rise in operating costs, Jio Payments Bank Managing Director and CEO Vinod Easwaran said.
“Some of the pricing and our margins have remained constant,” Easwaran said in an interaction with FE at the Global Fintech Fest. Pricing caps for products such as Aadhaar-enabled Payment System (AePS), a key transaction banking use case for payments banks, have remained unchanged since the licences were issued, even as the cost of doing business has risen, he said.
“I think the ability to revise pricing as per current cost structures would help the long-term sustainable growth of the industry,” he said, adding that payments banking remains a high-volume, low-margin business.
On Jio Payments Bank’s growth strategy, Easwaran said the bank would focus on three pillars — hyper-accessibility, user experience and “intelligent savings”. The bank aims to combine its digital offering with a physical network of more than half a million touch points to serve both digitally native customers and those requiring assistance.
The bank has also focused on faster opening of accounts, with customers able to open an account in under five minutes, he said. It sees an opportunity to serve as both a primary account for customers in Bharat and a secondary account for digitally savvy customers looking to segregate daily transactions.
Easwaran said payments banks would continue to have a role despite the rapid growth of UPI. While they cannot undertake lending, they can generate revenue through transaction and fee-based income, cross-selling, merchant payments, monetisation and API infrastructure, he said.
The large volume of transactions also gives payments banks access to behavioural data, which can help connect customers with other financial products over time, Easwaran said. “Payment banks are not going anywhere,” he said, adding that the model would continue to evolve.
Jio Payments Bank will also serve as a “front door” to the broader Jio Finance ecosystem, Easwaran said. Customers’ financial behaviour through the bank could help facilitate access to credit, insurance and investment products offered through the wider ecosystem.
On artificial intelligence, Easwaran said the bank is already deploying AI in operations, fraud detection and risk management. Use cases include AI-enabled systems that read customer emails and respond to their concerns, voice bots and AI-based monitoring of fraud rules and transaction activity.
On SBI’s exit from the payments bank, Easwaran said Jio Financial Services’ acquisition of the remaining stake and becoming the 100% owner had increased the bank’s agility in capital deployment and business strategy. Jio Financial Services had earlier been the joint venture partner with SBI in Jio Payments Bank.