After ruling smartphone screens of 4.4 crore users, Paytm Bank is now coming to the neighbourhood. The popular mobile wallet and payments bank firm is opening physical branches, even as it does not expect to sign up more customers from the same, MD and CEO Satish Kumar Gupta said to Financial Express Online in an interview today.
Paytm Payments Bank has opened its first Delhi branch, and its second overall. Gupta said that branches are essential for a bank to have its presence felt. He talked about why Paytm Bank branches may not cross double digits in the coming years, what kind of competition does it face from regular banks, and how the company plans to more than double user accounts to 10 crore, this year itself. Here are edited excerpts of Satish Kumar Gupta’s conversation with Prachi Gupta:
How many user accounts does Paytm Bank have now?
We have 4.4 crore savings account and 26 crore wallets associated with Paytm.
Where do you see this number in the coming years?
We see the total going to 10 crore by the current year.
Do you face any competition from scheduled banks?
It is a competition of course. Customer acquisition is an art. You have to compete with others. Plus we are working with constraints. We cannot offer full-time services if a customer wants to bank with us. But we are doing well. We are larger than many large banks.
And what is the reason behind that?
There is a fundamental approach on our part. User friendliness is one reason. We try to make their transactions secure. Over and above this, we try to offer customers zero-cost services.
How much revenue did Paytm Bank clock in the last year?
I’ll answer about the transactions we do. We have done over 40 crore transactions. The value of that is maybe in the range of Rs 25,000 crores.
Paytm was going to open 31 branches in its first year. Why has the lag happened?
We believe in the ‘do yourself’ approach. This is our first venture outside the first branch we opened, which is in Noida. We just opened to gain the experience. We will see our experience from this and will decide to open more. Because ours is a model in which the customers can themselves do the work.
What are these branches for?
The branch is to serve the customers. It is just to get our existence known. Probably people see only the bank. If a branch is not there, bank is not there. We are just trying to get our presence felt to the customer. If we open branches further it will be in single digit, nationally in the next two or three years. We will never get it to the double digit.
How does opening branches make Paytm different from the regular banks?
Not opening branches would have made us different.
But Paytm is a digital platform…
That’s what I am saying. It is a first branch we have opened to get experience, to get an understanding and the need of such an infrastructure to be there. It is not easy to have a branch. It is a costly affair. If we are offering zero cost services to the customers, you can’t have a branch. So it is not easy to have a branch.
Have you realised that mobile application alone cannot help in capturing customers, hence the branch?
Not at all. Mobile is helping us to capture the customers. We don’t expect customers from the branch, we won’t enrol a lot of customers by this. They will continue to be enrolled on mobile only without their being a need of the branch. That is our fundamental approach.
You have done three postgraduation. That’s very interesting. You left your education in the 70s. What prompted you to continue with an MBA in 2006?
That’s just a part of continuous learning. I’ll still do some more but presently I don’t have the luxury.
You spent over 34 years with SBI and then you shifted to Paytm. How was your experience?
It has been varied and wonderful. SBI is a traditional bank. Coming to National Payment’s Corporation of India — an emerging organisation which has made its footprints. I was deputed there and I created the Rupay card. It was a good journey there… transformational. Now in Paytm, it is an altogether new environment.
You once said that you look forward to leveraging your experience of banking and payment. To what extent have you been successful?
So I have experience of the ground. I held different positions with SBI. I understand the constraints of the management and probably with my experience, I will be able to deliver a more user-friendly and customised product in the various segments.