Paytm is gearing up to launch its payment bank in June and would woo its current base of about 122 million users to migrate to full banking services, according to its founder Vijay Shekhar Sharma.
When it launches payment banking services, Paytm plans to offer services such as transfering cash into the bank account and back, as well as cashouts using cheques at zero per cent fee, Sharma told FE.
Sharma eyes higher loyalty in financial services than in retail as a higher variable in financial services does not make the user migrate to a different provider.
The mobile wallet company last year got an approval from the Reserve Bank of India to launch its payments bank, as the country’s central bank opened up opportunities for newer companies to bring in access to basic banking facilities to crores of people who still do not have it.
The central bank approved payment bank license to 11 companies including Bharti Airtel, Vodafone India, Reliance Industries, Aditya Birla Nuvo, and Tech Mahindra.
The banking facilities will be embedded in the Paytm app as well, Sharma said, while demonstrating the new version of the app
Sharma said Paytm had spent about Rs 588 crores in 2015 as cash backs to its users, an incentive it had launched to encourage users to store money in an online space and use it. This has led the company to post its first ever loss of Rs 372 crore against net profit of over Rs 5 crore in the previous year. In FY15, Paytm clocked revenues of Rs 336 crore while its expenses were at Rs 697 crore.