Riding the wave of optimism backed by a sound investment plan worth Rs 20,000 crore, Paytm CEO, Vijay Shekhar Sharma, believes that its newly launched Payments Bank offers company an opportunity to offer 500 million people with bank accounts in the next four-five years and if each customer deposits even $100 with the bank it would make it a $50-billion opportunity. Paytm Payments Bank was formally inaugurated on Tuesday in New Delhi by Finance Minister Arun Jaitley.
“India is either unserved or underserved. If we are able to give financial services at that level, we are confident that we would be able to bring in big business,” said Vijay Shekhar Sharma at the launch event.
RuPay digital debit card and access to more than 100,000 Paytm ATM locations will be offered to the customers by the company across India. The company also plans an investment of Rs 5,000 crore for its financial business and improving the KYC (know your customer) operations. It will set up centers across India to fast forward completion of KYC process for its customers and has already put in Rs 1,700 crore this year.
“We are unveiling our money market fund, launching our debit card and we’ll have the capabilities to allow enterprises to open business accounts,” announced Paytm founder.
The financial service will be the country’s mobile-first bank with zero fee on online transactions and no minimum balance, according to a statement from the company. Despite the proliferation of smartphones and cheap data rates bringing Internet access to millions, banks in the country are yet to build large digital banking capabilities. Indian consumers are not entirely comfortable with digital financial startups either. Sharma said both these could work in Paytm’s favor.
Paytm Payments Bank is majority-owned by Vijay Shekhar Sharma. One97 Communications, which is backed by Alibaba Group Holding, Ant Financial Services and others, holds the remaining 49 percent. The payments bank morphed out of Paytm’s digital wallet which got a huge boost and amassed over a hundred million customers after India took its high currency bills, totaling nearly 90 percent of the value of cash, out of circulation last November.