Pay­ment Wal­lets Have No Fu­ture: Puri

RAIS­ING RED FLAG There is not enough mar­gin in this busi­ness for cos such as Paytm to be­come sus­tain­able

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Mum­bai: Aditya Puri, man­ag­ing di­rec­tor of HDFC Bank, took a dig at pay­ment wal­lets such as Paytm, and said “wal­lets have no fu­ture” and that new banks will have to in­vest in ac­quir­ing new cus­tomers, just like the older ones. “Whether you look at Ap­ple Pay, which is an­other ver­sion of a wal­let, or Paytm, or, but all of them are go­ing to ride on the ba­sic sys­tem of a bank, (and) fi­nan­cial ser­vices,” Puri said to a packed au­di­ence at the penul­ti­mate ses­sion of the on­go­ing Nass­com In­dia Lead­er­ship Fo­rum (NILF) in Mum­bai, the an­nual cel­e­bra­tion of the In­dian in­for­ma­tion tech­nol­ogy ser­vices in­dus­try.

Fur­ther, he said the pay­ment wal­lets model was not sus­tain­able.

“(The) Wal­let propo­si­tion as a valid eco­nomic propo­si­tion is doubt­ful. There is no money in the pay­ment busi­ness. The cur­rent loss re­ported by Paytm was .₹ 1,651 crore and you can’t have a busi­ness that says pay (.`) 500 bill and take (.`) 250 cash­back, so come up with some­thing else. And if he wants to copy Alibaba, he can’t be­cause In­dia’s reg­u­la­tors are bet­ter,” Puri said.


He added there was not enough mar­gin in the pay­ments busi­ness for the wal­lets to have a fu­ture.

“Mr Puri said this in the con­text of vi­a­bil­ity of wal­lets in gen­eral, to but­tress his point,” clar­i­fied HDFC Bank spokesman Neeraj Jha in a twit­ter post. Paytm de­clined to com­ment on Puri’s re­marks.

The ses­sion, ti­tled “Re-imag­ine, not re-en­gi­neer!” was a can­did con­ver­sa­tion be­tween Mahin­dra Group man­ag­ing di­rec­tor Anand Mahin­dra, Puri and NDTV con­sult­ing ed­i­tor Vikram Chan­dra, and cov­ered a whole range of sub- jects, from changes in the bank­ing sys­tem, to US pres­i­dent Don­ald Trump, in­creas­ing trans­parency in In­dia, the chang­ing na­ture of tech­nol­ogy in the world and its im­pact on In­dia.

Puri also said ques­tion­ing the val- id­ity of banks was wrong be­cause “no­body was re-imag­in­ing a bank”, but all the in­no­va­tion, even in the Sil­i­con Val­ley was be­ing built on top of the bank­ing in­fra­struc­ture.

In­dia has reached a point where com­pe­ti­tion is blur­ring, and there is a sec­u­lar shift in tech­nolo­gies such as com­put­ing, an­a­lyt­ics and cloud, which has also brought down the im­por­tance of ge­o­graph­i­cal bound­aries.

How­ever, talk­ing about the fu­ture of new banks, Puri said, “As far as the new banks are con­cerned, they will have to spend like the old banks on get­ting cus­tomers. It’s like mak­ing chicken curry with­out the chicken. Get me the chicken and I will tell you how much com­pe­ti­tion there will be.” Sup­port­ing Prime Min­is­ter Modi’s de­ci­sion to de­mon­e­tise high value cur­rency, Puri said cash is more ex­pen­sive to main­tain and move around, and that the push to­wards dig­i­tal pay­ments has in­creased trans­parency and ac­count­abil­ity in the sys­tem.


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