Paytm, US firm in tech tie-up for payments bank

Sources say deal with Florida-based FIS Global would be close to Rs 150 cr over a period of five years

With a view to launching its payments bank, Paytm has tied up with US-based FIS Global, for technology, say sources close to the company. The bank may come by the second half of the next year.

Sources added the deal would be worth Rs 150 crore and the contract would span five years. FIS is a Fortune 500 company.

Paytm is a mobile payment and commerce platform owned by One97 Communications.  Founded by Vijay Shekhar Sharma, Paytm plans to turn its 120-million wallet users into account holders of its payments bank once it is launched, it is learnt.

FIS offers the financial world payment processing and banking solutions, including software, services and technology outsourcing.

According to experts, the core banking system is the backbone of any bank. This is one of the critical elements of information-technology infrastructure, a source said. ''All consumer transactions will go through this, so it is critical to have a foolproof system.''

FIS says it has more than 20,000 clients in 130 countries. According to the company website, its technology enables billions of transactions that move over $9 trillion per year around the globe.

According to sources, Paytm would tie up with firms for banking operations over the next three months.

Last month, Paytm hired Shinjini Kumar as chief executive of its proposed payments bank. Kumar has worked at organisations that include PricewaterhouseCoopers and Reserve Bank of India.

Kshitij Sanghi, earlier with McKinsey & Company, has joined Paytm for the bank. Narendra Singh, earlier with Boston Consulting Group, has been hired as deputy general manager for project management. Varun Khullar, who worked for ITC, has joined as vice-president to look at partnerships. Vikas Purohit, formerly with Amazon, is vice-president and looking after branch and business-correspondent network.

Paytm plans to invest Rs 1,200 crore in the payments bank during the first three years.

The bank would set up 20 branches, 200 smaller branches, and take on at least 1,000 agents, it is learnt.

Paytm is one of the eleven,  including Airtel, Vodafone, Aditya Birla Group, to secure a licence for payments bank in August 2015. The entities which got permission from the central bank must have an initial capital of Rs 100 crore each and will have to start operations within 18 months.