A year on, Paytm Payments Bank nudges users to reactivate wallets

Paytm Payments Bank is nudging its users to reactivate their digital wallets, a year after the Reserve Bank of India (RBI) imposed restrictions on the associate entity of One97 Communications (OCL). 

The reactivation effort comes at a time when the payments bank has lost 72.25 per cent of its prepaid payment instrument (PPI) wallets from 363.15 million in November 2024 to 100.73 million in December 2024, according to RBI data. This was much lower from 630.7 million in January 2024. 

The payments bank is activating digital wallets for those customers who have not transacted for the past 12 months. It is also seeking reasons for not using the wallet. These include questions such as, if customers are using Unified Payments Interface (UPI) for digital payments, use of other wallets, and no product benefits from its offering, among others. 

The entity is verifying such customers with an Aadhaar One Time Password (AOTP) following a face verification as part of Know Your Customer (KYC) norms for existing users, Business Standard has reviewed the process.  

Queries sent to Paytm-operator OCL remained unanswered till the time of going to press. More reactivation means that users will continue to be on the platforms for another 12 months. 

However, customers can only transfer or withdraw their existing wallet balances. The payments bank does not permit any deposits that are in line with the RBI’s regulatory action in January last year. The reactivation of customer wallets comes on the back of the terms of use of digital wallets issued by Paytm Payments Bank in the past. 

“The customer wallets with no financial transaction for a consecutive period of one year shall be made inactive by PPBL after sending a notice to the customers. These can be reactivated only after validation and applicable due diligence, as per the process set by PPBL,” according to the terms and conditions enlisted on the Paytm Payments Bank website. 

During an analyst call after the company’s quarter three results (Q3FY25), Paytm’s chief executive officer (CEO) Vijay Shekhar Sharma had said they wanted to restart the wallet business without divulging details on the timeline of implementation. 

“We are waiting for Paytm Bank’s final outcome and on the basis of that we'll take the next step (...) we’ll do it quickly, but it will take time,” he had said.  

During its Q2FY25 analyst call, Sharma told analysts, “Paytm wallet was operated by Paytm Payments Bank, which is under regulatory supervision right now, we would wait for a clear direction on that side first.” 

The banking regulator allowed deposits to be withdrawn or transferred to another account, up the balance available in the wallet after March 15, 2024.  

However, transferring funds into the wallet or top-ups was not allowed after March 15. The RBI had also clarified that PPBL cannot onboard any new customers, in continuation of the direction that was issued in March 2022. It had clarified that top-up recharge of PPBL Fastags cannot be done after March 15, while it can be used up to the balance available.  

 

Shrinking Base 

 

*  Firm’s reactivation effort at a time when wallet base has shrunk to 100.7 million

 

*  Activation in progress for those who have not transacted for past 12 months

 

*  Customers can only transfer or withdraw existing balances 

 

*  RBI imposed restrictions on Paytm Payments Bank in January 2024