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Paytm Payments Bank to commence operations on May 23

Paytm will commence operations of its payment bank on May 23 as per a tweet by Paytm CEO Vijay Shekhar Sharma. Paytm got the licence to operate as a payments bank in January this year from the Reserve Bank of India. The licensee of the payments bank is Sharma. Along with the tweet, the Sharma posted a public notice by Paytm on the transfer of wallet business to the Paytm Payments Bank Limited. The notice said that the company will transfer customers current wallet to the Paytm Payments Bank limited in the same capacity, if there was no communication from the customers by May 23.

Do read: Paytm’s journey to a payments bank, 7.5 years after launch

Note that in December, Paytm had announced that it would be shifting its wallet customers to the payments bank. The company had then said that customers had the option to decline the transfer by December 21, 2016. The customers who do not wish to transfer their wallet to the bank can do so by notifying the company through an email or logging on the portal. Customers can redeem their balance with a one-time transfer to their own bank accounts.

Sharma will own 51% in Paytm Payments Bank, while One97 will hold the rest. According to RBI guidelines, promoters of the payments bank should hold at least 40% of its paid-up equity capital for the first five years of its operations. Meanwhile, foreign shareholding in the payments bank would be as per the FDI policy for private sector banks, currently capped at 74% of the paid-up capital from all sources.



Paytm had reported 1.5 billion transactions for the financial year ended 31st March 2017 and a gross merchandise value (GMV) of around $5 billion. The company said in terms of transactions it was a growth of 3x from the previous year. Off the 1.5 billion transactions, 600 million were telecom recharges and 140 million transactions were for third-party online payments. The company had said it had 100 million offline transactions a month, 2 million travel bookings a month across train, bus and flights, and sold over 3 million movie tickets monthly. Around 55% of its traffic was from Tier 2 and Tier 3 cities. The company claims it had 218 million wallets however, it had not disclosed how many of them are active.

Recent developments

Last week, there were unconfirmed reports of Paytm signing a non-exclusive term sheet to acquire rival wallet player FreeCharge from Snapdeal. However, it was not clear on what will happen to FreeCharge’s wallet service once it gets acquired by Paytm. Paytm already has an existing wallet service which will now operate under its payments bank. Paytm has more than 218 million registered users and over 50 million merchants. The company claims that it is doing more than 10 million transactions a day. If the deal with Paytm goes through, Freecharge will probably have to surrender its wallet licence to the RBI as CitrusPay did when it was acquired by PayU.


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    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ