Paytm Payments Bank to begin services in NCR today
NEW DELHI: Paytm Payments Bank (PPB) is set to go live on Tuesday with a select first-phase roll-out by offering accounts on an invite-only basis to consumers largely in north India, and said it would invest about ₹400 crore over the next two years to build its banking network across the country.
The first physical branch of Paytm Payments Bank will go live in Noida on Tuesday.
The bank plans to expand its physical presence to 31 branches and 3,000 customer service points in the first year. The company is targeting 500 million customers by 2020.
“We will first start the services in Delhi-NCR, followed by the second phase of launch in other top metro cities,” said Vijay Shekhar Sharma, founder of One97 Communication Ltd, which owns Paytm, over phone. The second phase of the roll-out is expected after three months.
The company is expecting a customer acquisition cost of ₹125-150 crore over the next 12 months.
PPB will offer accounts with a zero-balance requirement and every online transaction such as immediate payment service, national electronic funds transfer, real-time gross settlement will be offered free of charge.
For savings accounts, the company will also offer an interest of 4% per annum, much lower than competitor Airtel Payment Bank’s interest offering of 7.2%.
PPB will offer current accounts to its millions of merchants. It will also offer a cashback of ₹250 to its first million customers who reach a deposit of ₹25,000.
According to Sharma, the free of charge fund transfers and between Paytm wallets will make them “the most compelling bank account and wallet for consumers”.
The company will issue debit cards with an annual fee of ₹100 in partnership with Rupay.
PPB has already received investment of about ₹220 crore from One97 Communications Ltd and its founder Sharma in November. Sharma was one of the 11 recipients of RBI’s payments bank licence and has personally invested ₹112 crore of the total investment received.
“RBI has given us an opportunity to create a new kind of banking model. We are proud that our customer deposits will be safely invested in government bonds, and be used for nation building. None of our deposits will be converted in to risky assets,” said Sharma, also chairman of Paytm Payments Bank.
The company said in a statement that it will roll out its beta banking app for its employees and associates and that Paytm customers can request an invite by going to the website or on the Paytm iOS app.