With Paytm, India’s largest mobile wallet service provider, getting its ‘payment bank’ licence on Wednesday, the company plans to now set aside $250 million for this business, which will be placed under a new subsidiary.
Founder and CEO of Paytm Vijay Shekhar Sharma, who will be a majority shareholder in the new subsidiary, told
FE, “Overall as a business, we want to reach out to 500 million people with 1 lakh crore of business by 2020. We will be making an investment of $250 million in the payment bank business.”
The brand Paytm, owned by One97 communications, was one among 11 companies along with Reliance Industries, Aditya Birla Nuvo, Vodafone and Airtel, that the Reserve Bank of India granted “payment bank” licences to on Wednesday. Paytm was the youngest company in the lot.
The money to be set aside will be used for setting up infrastructure, strengthening the payment systems to penetrate into rural areas, and for hiring new talent. The company can now accept deposits of up to 1 lakh and can offer current and savings account deposits. It can also issue debit cards and offer internet banking.
The cumulative user money lying with Paytm had crossed the Rs 100 crore mark in June this year. Until last month, the company had 100 million wallet users carrying out 75 million transactions every month.
In February this year, Ant Financial, the financial arm of Alibaba, had picked up 25% stake in the company for about
“People will be far more attracted to keep money with us now, as we will be able to give interest on deposits. This will help us to connect with rural
India faster. Alibaba always wanted to part of India’s growth, and with this achievement they are excited too,” Sharma told FE on Thursday.