Vijay Shekhar Sharma, Founder, Paytm
Lack of currency notes has forced many, especially the senior citizens, to pull up their socks and get acquainted to the latest methods of digital transactions like e-wallets. "I have been using Paytm for a week now and it is very easy," said Subhash Sharmaa (59), a retired government employee. He felt the need to use Paytm after he repeatedly failed to send money to his daughter in Lucknow. "I was tired of standing in bank queues for hours," he said. Sharmaa asked his son to teach him how to operate the application and he has further spread awarness about it among his friends as well. Though some senior citizens have shown inclination on learning to handle e-wallets like Paytm, many of them have rejected its viability. "I do not know what this government wants. I was a bank employee and I have to struggle for cash myself these days. None of the banks have 100rupee notes and how can they expect people to work with just Rs 2,000 bank notes in the market?," asked an agitated Shahid Khan (62). A Paytm user, Yusuf Malik, son of Dr M A Malik, a passerby and a Paytm user said: "My father has been using Paytm even before demonetisation. He has always been very tech savvy and he likes to keep himself in tune with the times." Even though demonetisation has paralysed residents in so many ways, it might have opened the doors for a digital India that's moving to e-cash, said another resident.
Paytm wallet to convert into Payments Bank; all you need to know
Paytm, the digital wallet service owned by One97 Communications Ltd, where founder Vijay Sharma
holds a majority stake of 51% is to be converted into the Paytm Payments Bank after the reception of the bank licence by the Reserve Bank of India. Paytm, the digital wallet service owned by One97 Communications Ltd, where founder Vijay Sharma holds a majority stake of 51% is to be converted into the Paytm Payments Bank after the reception of the bank licence by the Reserve Bank of India. The company released a statement on Monday and stated that according to the directions of the Reserve Bank of India, the company is to transfer its wallet business into the newly incorporated Paytm Bank entity following the receipt of necessary approvals. The Paytm Payments Bank will start under a Payments Bank licence awarded to Vijay Shekhar Sharma. According to reports by the Livemint, this new unit will be responsible for the firm’s payment businesses, which include the Paytm wallet whereas One97 Communications still remains in charge of the e-commerce business. One of the spokespersons of the company told Livemint that the founder, Vijay Sharma is to hold a majority of the shares in the Paytm Bank. It was reported that the bank would not have any external shareholders. The spokesperson also confirmed that Vijay Sharma holds 51% of the form while 49% is owned by One97 Communications. In the company statement that was issued on Monday, it was stated that the user’s current Paytm Wallet would move to the Paytm Payments Bank Limited in the same capacity if the company doesn’t receive any communication from the user before December 21, 2016. The statement reads that if the customer chooses not to use the Paytm wallet, he/she could send emails to their customer care emails ids and notify the company of opting out. The balance in the wallet could then be redeemed by a one-time transfer to their own bank accounts. However, the appropriate details such as the name of the account holder, account number and IFSC Code of the bank must also be provided to redeem the amount within 15 days of the notification. One failing to do so, the amount would be transferee to a ‘specially designated account’ with the Paytm Payments Bank Limited and the user would not be able to transact with their wallet money until bank details are submitted and the money is transferred into the desired account. The statement also reads that if the customer’s Paytm wallet has been inactive for a period of 6 months or has zero balance, it would not be transferred to the Paytm Payments Bank unless specific consent regarding the same is given by the customer.
Paytm to transfer wallet business to payments bank
One 97 Communications, the parent company of digital payments provider Paytm is preparing to merge its wallet service with the eponymous payments bank-- the licence for which is owned by its founder Vijay Shekhar Sharma— once it receives regulatory approval. The Noida-based company had
incorporated Paytm E-commerce Pvt Ltd and Paytm Payments Bank Ltd as separate entities in August. The company also operates an ecommerce marketplace, which is expected to be spun off and serve as an entry pad for online retail operations of Chinese ecommerce giant Alibaba according to sources aware of the plans within the company. "As per the directions of RBI, the company will transfer its wallet business to the newly-incorporated Paytm Payments Bank Limited (PPBL) after receipt of necessary approvals," a spokeswoman for Paytm told ET. She declined to comment on the entry of Alibaba into the Indian e-commerce sector through the Paytm marketplace, terming it as 'speculation'. Alibaba’s digital wallet Alipay is in a technology sharing partnership with Paytm. The combined entity of Alibaba and its subsidiary Ant Financial hold 40% stake in One97 Communications, having invested about $680 million in the company. "The (payments bank) is in the process of obtaining final licence from RBI and will commence operations after obtaining due approvals," the Paytm spokeswoman said. The central bank has granted an 'inprinciple payments bank licence' to Sharma, who holds a 51% share in the payments bank, with the balance owned by One97Communications. Sharmaa in an earlier interview with ET had said he had made an Rs 112 crore investment for his majority stake in the payment bank. The Chinese conglomerate Alibaba, does not directly own a stake in the soon-to-be launched payments bank. "Banks have their own mobile wallets, so it should not be a problem for Paytm to have its wallet business merged with the payments bank business. However, in line with regulatory requirements the company has had to segregate its ecommerce business from the payments business,” said Bhavik Hathi, managing director of consultancy firm Alvarez & Marsal. Paytm has been one of the main gainers in the push towards digital currency following government's move to demonetise higher value currency notes. Wallet companies like Paytm have registered a spike in user base as well as the number of transactions. According to data shared with ET, Paytm claims over 5 million transactions on a daily basis with a peak of Rs 120 crore worth of transaction in a single day. A recent report by consultancy and research firm EY India on 'Alternate Revenue Models for Payments Banks in India' states that "adjacent revenue opportunities for payments banks would be to explore expanding this ecosystem by partnering with e-commerce players and offering assisted services to customers through their business correspondent network," allowing for micro savings accounts and increasing the use case for associated digital wallets. Paytm recently came under public scrutiny as the debate on demonetisation and increase in wallet signups brought to fore claims of Chinese investors benefitting from the move in India. ET had reported that Swadeshi Jagran Manch, which has been campaigning against the inflow of Chinese goods into India, had said that it will 'study' the relationship between Paytm and Chinese internet company, Alibaba Group. Alibaba's digital wallet Alipay is in a technology sharing partnership with Paytm.