Popular digital payments player Paytm, which shot to fame after the demonetisation experiment, is now branching out into the fast-growing payments bank segment.
Over the past few months, its parent firm – One97 Communications – has pushed hard to expand its businesses, with founder Vijay Shekhar targeting as many as 300 million new customers – a significant upgrade from its existing 200 million plus customers – on the back of the launch of new financial services such as deposits, wealth management, insurance and financial lending.
What is Paytm new payments bank?
Paytm's Payments Bank will be a new service offered by One97 Communications, approved for carrying out business by the Reserve Bank of India (RBI). The payments bank will subsume and manage the existing wallet service, and separate permanent bank accounts that will bring with them a slew of financial features.
How to open a Paytm payments bank account?
Post the launch of the service on Tuesday (May 23), users will be invited to open a permanent account with the payments bank. As Paytm's new service is regulated by RBI's guidelines, so users will be asked to upload mandatory Know Your Customer (KYC) documents like Aadhaar and PAN.
What happens to the money in your Paytm Wallet?
If the customer chooses not to open an account under the payments bank, the money in their wallet will be transferred simply to a new wallet operated by the Paytm payments bank and will reflect in the Paytm app. The user will incur no charges. Customers, however, are also being given the option of discontinuing their wallet services altogether by notifying the company before May 23.
Why open an account in the payments bank?
The major difference over the existing wallet service will be the addition of new financial features that come with the accounts under the payments bank. For example, Paytm will offer interest on the money in its payments bank accounts, a feature not available under its wallet service. Other services like debit cards and money transfers found with permanent bank accounts will also be possible with the new service.
What will happen to the money in Paytm wallets?
The money will be transferred to the Paytm Payments Bank Limited as the wallet business will become part of the new company. It will happen automatically, and you need not do anything. Other banks too have their wallet businesses apart from their usual business.
Will I get a bank account number, chequebook , debit card, etc.?
Only if you opt to open an account with the new payments bank of the company. Otherwise, your wallet will keep working as it is. The company will give you an option to open a separate account. You will earn interest on your money if you choose to open a payments bank account.
How is a payments bank different from the usual bank?
A payments bank cannot lend or give advance to customers. It can issue cheque books and debit cards but not credit cards. There is a limit on the money you can keep in your account. You cannot keep more than Rs 1 lakh in the Paytm payments bank. The purpose behind these banks is to provide quick and basic banking services to the people at the bottom. Airtel too is launching a payments bank.
What if I do not want to make the switch?
Making the switch is not optional and all accounts will automatically be transferred to the Payments Bank. However, if the user wishes to discontinue, the wallet will have to be closed. That can be done by sending an email to Paytm Helpdesk, help@paytm.com along with user bank account details like account number and IFSC code. The wallet will then be closed and any amount in the wallet will be transferred to the bank account specified by the user.
Can money be transferred to other bank accounts?
Through the new Paytm Payments Bank, users can transfer money to any bank account. However, the same facility will not be available to wallet users.
What if I have not been a regular Paytm user?
For users who have not used their Paytm wallets for over six months or have zero balance in their wallets, Paytm will not switch the wallet to Payment Wallet. Such users will have to specifically give consent over app, web or email for the conversion.
“As per RBI guidelines, your Paytm Wallet will soon be transferred to the newly incorporated Paytm Payments Bank. Till now they were issued by One97 Communications Limited. This will happen automatically, and Paytm users do not need to do anything additional. Our customers will continue to use all the services provided by the Paytm Wallet, and enjoy all the benefits . Log in details, wallet balance and user experience will remain the same,” Paytm said in a blog post.
Besides these benefits, Paytm Payments Bank will also offer interest on the money available in your account.
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