Paytm Payments Bank is gearing up for growth, courtesy the changes in guidelines for prepaid payments instruments (PPIs) introduced by the Reserve Bank of India (RBI). The company has decided to invest $500 million and would hire another 10,000 people on the ground. Confident of more people now opening accounts with their payments bank, Renu Satti, managing director and chief executive officer of the fintech firm, tells Karan Choudhury that any mobile wallet that does not have a bank affiliation might have to shut shop in the future. Edited excerpts:
How do the new RBI guidelines pan out for Paytm Payments Bank?
We are happy that the RBI allowed us a smooth transfer of the wallet to Paytm Payments Bank. Now, one does not need to keep balance in the wallet. He can earn an interest of more than four per cent in the payments bank savings account. With our wealth management solution, the interest rate can go even higher than six per cent.
Do you think Paytm, which has a wallet and a payments bank, would be at an advantage compared to other players who might only have a standalone wallet?
Standalone wallets are clearly at a disadvantage. These companies cannot offer this return. We believe the customers have to move to the bank account-led wallet. Money in the payments bank account will allow the customers to seamlessly use the wallet.
Another thing is that the wallets are fundamentally meant to be used for merchant payment in combination with a bank account. So, we can offer a full set of financial services, including wealth management, lending and payments, along with deposit offering.
Basically, you can have a debit card connected to your bank account into which you can transfer any amount of money from your wallet. And, then you can use your Paytm Payments Bank debit card everywhere. In case of standalone wallets, you can’t do that because there is a limit on the amount of money that can be transferred to a bank account. A debit card allows you to transfer money to any account without restrictive limits.
With full e-KYC (know-your-customer) for wallets being made mandatory, do you think this would directly benefit the payments bank as new accounts might open?
We are not asking customers to open bank accounts when they do KYC for their wallet. However, this will definitely give us a great jump in the number of bank accounts that we can open as we are meeting more people who are doing full KYC for wallets and now they may also open a bank account with us.
On the back of new norms, what sort of expansion are you expecting?
We will be investing $500 million into KYC operations and customer acquisition in the next three years. We are also expanding our payment use cases and will offer a bouquet of financial services including wealth management and lending. Our target is to reach 500 million customers by 2020.
How would you go ahead with the new KYC norms? Will you add more people?
We are hiring 10,000 additional people, so we’ll have at least 20,000 people on the streets doing Paytm KYC along with our partners and will set up 100,000 KYC points as well.