Vodafone India is planning to launch its payments bank by March, the company’s Managing Director Sunil Sood told Business Standard. “We are in the final stages but haven’t applied for the final license yet,” Sood, was quoted as saying to the publication. MediaNama has written to Vodafone for a confirmation; we will update the story once we hear from them. Vodafone received in-principle approval from RBI for a payments bank license in August last year after it initially applied for the license in February 2015.
Last month, Vodafone’s rival operator Airtel launched its payments bank pilot in Rajasthan, making it the first company to go live among all the licensees. The company was providing one minute of talk time on a subscriber’s Airtel mobile connections for every Rupee deposited in the payment’s bank as promotion for first time deposits. The payments bank will later expand to Andhra Pradesh, Telangana and Karnataka on Monday. Currently Airtel is charging 0.65% as cash withdrawal fee from account holders in order to discourage them to use cash and offers 7.25 % per annum on deposits in savings accounts.
Eight players yet to launch operations
Around 8 players hold an RBI license for payments bank including Airtel, Vodafone, Reliance Industries, Idea Cellular, Paytm, FINO Paytech, India Post and National Securities Depository Limited. Tech Mahindra pulled out in May and decided not to pursue a payments bank business in May. In the same month, Sun Pharma promoter Dilip Shangvi who earlier partnered with IDFC Bank and telecom operator Telenor to start a payments bank, surrendered his license.
In March this year, Cholamandalam Investment and Finance Company had decided to abandon its plans to set up a payments bank, after the company’s board red-signaled the move stating “competition and other factors, including the long gestation period”. Note that a payments bank player cannot lend money, issue credit cards, or setup a NBFC subsidy as per RBI regulations. It can only be used for payments, deposits, and players can issue debit cards instead.
Vodafone M-Pesa launches merchant payments
Vofaone’s payments and digital wallet app M-Pesa yesterday introduced cashless payments solution which allows users to pay registered merchants and retailers via the M-Pesa mobile wallet app. Users can pay directly from their wallet balance, credit/debit card and bank accounts. M-Pesa also allows users to make phone recharges, and to pay electricity bills,.