State run telecom operator BSNL will partner with the State Bank of India (SBI) to launch an online wallet within a month, reports the Indian Express. Anupam Shrivastava, the chairman and managing director of BSNL told the publication that the service will be made available countrywide in 15-30 days.
SBI and BSNL will also approach their nodal ministries to enable the wallet to disburse subsidies under Direct Benefit Transfer (DBT) scheme. Shrivastava mentions that the product testing is done, and it is ready for release once the permissions are granted. The wallet is likely to be called SpeedPay, the same name as the wallet BSNL launched in partnership with Andhra Bank in Telangana and Andhra Pradesh in July last year.
At the time, BSNL had said that it was in talks with Punjab National Bank and Bank of India for expansion of its service to Karnataka, Kerala and Tamil Nadu. Interestingly, in June last year, BSNL said it would launch a mobile wallet in partnership with SBI. However, it looks like this partnership was delayed, during which time BSNL partnered with other regional banks to launch the service.
The SpeedPay wallet let users withdraw cash up to Rs 1 lakh through the mobile wallet service at BSNL or branch outlets, load money from BSNL outlets and recharge their mobile wallets and pay for services. BSNL charges 1% of the transaction amount when users transfer money from the wallet to other bank accounts or in case of a cash withdrawal.
Why the bank partnership?
It’s worth noting that BSNL does not have a prepaid payments instruments license from the Reserve Bank of India to run a digital wallet; the partnership SBI means that it won’t need a wallet license, but the wallet will be subject to scrutiny from the Reserve Bank of India. It’s not the first time that such a deal has happened, and banks such as RBL Bank and DCB Bank have been tying up with other wallet operators and payment companies. More recently, YES Bank had partnered with FreeCharge to enable the latter’s wallet to provide mobile and web transactions.
The connection with banks also allows the payment companies to store the funds in an escrow account with the bank which can be moved to different merchants’ and beneficiaries’ bank accounts. The funds which are stored in escrow also allow customers to take back their money stored in the wallets to their respective bank accounts if they cannot find use cases for it.
SBI and payments partnerships
BSNL seems to be trying to play catch up with other telecom operators in the digital payments front and it had applied for a payments bank licence too with the RBI. However, SBI has jointly applied with Reliance Industries Limited (RIL). For the payments bank licence, SBI has formed a joint venture with RIL with 30% stake in the company.
Note that earlier in 2011, Airtel and SBI had come together to form a joint venture for financial inclusion but the partnership fell through after the Reserve Bank of India expressed its apprehension and said it was felt allowing a telecom player a JV with a bank may lead to the back-door entry of a non-banking entity in banking.
SBI also operates the digital wallet Buddy which claims to have 2.7 million customers.