Paytm Plans to Launch its Payment Bank this week

Paytm Plans To Launch Its Payment Bank This Week

Paytm is on the verge of entering into the banking world as it is officially going to announce the launch of Paytm Payments Bank Limited. Paytm officially declared this announcement when they got an approval from the Reserve Bank of India. The official date of the launch of the bank is likely to announce by the end of the week or mid-week. The news comes on the heels of its announcement of selling their stake to e-commerce giant Alibaba.

Vijay Shekhar Sharma, the founder of One97 Communications and Paytm, said that the company would be expanding its banking operations by the end of March 2017 or later. The important measures of building distribution channels and reaching out to the customers would carry out in the coming months.

Some of the companies such as IDFC, Cholamandalam Finance and Tech Mahindra have decided not to expand their banking operations. However, the other companies like India Post and Airtel have already started the payment banks in January and February this year.

The payment banks offer customers with debit cards and deposit limits and a customer can deposit up to one Lakh in a payment bank account. These new payment banks’ aim is to reach out to the customers through the Smartphones and not through the branches.

Currently, Airtel and India post are offering 7.25% and 4.5-5.5% interest on savings accounts, however, Paytm is not sure of the interest rate that they would be offering to their customers. It has also declared that the customers who are already having an account with some wallet money in it, will have a switch of accounts, it means that the customers must still have to give consent to open a Paytm bank account and only then the company will transfer the e-wallet into the bank account.

Confirming the news, the company is planning to invest Rs600 Crore in the next 10 months time to increase the QR code-based payments network. The QR code is a machine-based label that provides the merchant’s account details. All the customers need to do is, scan the code using their Smartphones to pay the money to the merchant’s account. Besides giving away good deals on a variety of products, Paytm is also known for providing a great Customer service to the Paytm Customers.

There are chances of getting more 10 million merchants using these codes by the end of December 2017 across 650 districts. The company receives 65% of transactions through QR codes platform. After the demonetization movement, there are many users who prefer to use their e-wallets instead of cash and with Paytm, launching its payment bank will attract more users to get the accounts opened and transact digitally on a large scale.