Paytm, the acronym for “Pay Through Mobile” is Indian e-commerce shopping website launched in 2010.It services includes online mobile and DTH recharging and paying bills of various portals such as electricity bills, gas bills etc online. In 2014 the company launched Paytm Wallet and it is India’s largest mobile payment service platform with over 40 million wallets. This service is now the most preferred mode of payment across leading consumer internet companies such as Uber, BookMyShow, and MakeMyTrip.
Paytm is planning to launch payment banks by the end of this financial year, which will be the country’s first payment bank. It is using its mobile wallet experience to give a clear advantage over other established business. Paytm currently has more than 104 million mobile wallets and expects to reach 150 million by March 2016. Paytm was the youngest licensee among the 42 applicants that got approval for starting payments banks. The business of these entities includes taking deposits; convey remittances and assigning payments to their recipients. This service enables the migrant workers to send money from their home irrespective of geographical variation.
Vijay Shekhar Sharma , the founder of Paytm proposed that by launching the payment banks it is looking on merchant transactions and person to- person payments. He added that they have the technology with them but require more people to work upon this. So the company has decided to hire 100 staffs within a month to start its new business ‘Paytm Payment Bank Ltd’. They are also hunting for a CEO to streamline their entire business. For this, Sharma is looking for a person with financial services and consulting background with a fresh outlook on operations. The new company formed to house the payments bank, will also house the mobile wallets business and the wallet license will be surrendered shortly to the RBI to operate under the payments bank license. After this the escrow accounts which is currently opened on a third party nationalized bank will be moved to the Paytm Payment Bank.
51% in Paytm Payment Bank will be held by Sharma and Alibaba Group-backed One97 Communications, the holding company of Paytm’s businesses holds 39% and the rest 10% will be held by the subsidiaries of One97 and Sharma. In due course of its business Sharma is also looking to partner with banks as the customers would like to feed into a main bank due to restrictions on what payments banks can offer.
