Paytm Payment bank is live for consumers in India. After a final go ahead by the Reserve Bank of India (RBI), the mobile wallet firm has diversified itself into a full-fledged digital bank. 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.
In case you’re a Paytm wallet user – and that number has grown a lot since November – and you’re wondering how this change will impact you, here is everything you need to know.
1. All Paytm wallet accounts will automatically be migrated to the new Paytm Payments Bank. If you don’t want to continue with the bank, you have to opt out by emailing [email protected] or visiting paytm.com/care to opt out and redeem your balance by transferring it to your bank account.
2. Your account will remain a wallet account with PPBL, not a bank account. Accounts that have been inactive for six months, and have zero balance, will not be transferred to PPBL without opting-in. In addition to the wallet account, you will also be able to open a Paytm payments bank savings or current account. Although both will have the same login, you will need to open a bank account separately.
3. The Paytm Payments Bank accounts are being rolled out as a beta, for employees and associates. Other people can also request an invite to become account holders in the bank. These accounts have a limit of Rs. 1 lakh per customer, and are different from wallets because they can offer debit cards, and interest.
4. To get a Paytm Payments Bank account, you have to visit Paytm’s Bank page, and then click on Request an Invite. This will ask you to sign in to your Paytm account, and once you do that, automatically log your interest in becoming an account holder.
5. If you transfer more than Rs. 25,000 into your Paytm payments bank account, you will get a cash back of Rs. 250 (1 percent), up to four times.
6. There is no minimum balance requirement for the bank account. Also, online transactions (such as IMPS, NEFT, RTGS) will not have any charges.
7. A big difference between a wallet and a payments bank is that the latter can offer interest. Paytm will be paying 4 percent per annum. This is lower than the 7.5 percent interest that Airtel payments bank is offering, and in line with what you get from Axis, ICICI, and HDFC.
8. Unlike wallets, payments banks can offer debit (but not credit) cards. According to Paytm’s website, physical services such as a chequebook, demand drafts, and debit cards, will be available from the Paytm payments bank, at a nominal fee. Interestingly, Airtel isn’t offering a physical debit card, but a virtual one to use online.
9. The Paytm bank will issue a Rupay debit card, which will be free, but it will charge Rs. 100 + delivery as an annual fee; a lost card replacement will also be Rs. 100 + delivery. A 10-leaves chequebook will also cost you Rs. 100 + delivery charges.
10. Paytm isn’t bringing out its own ATMs. However, its debit card can be used with no charges five times at any non-metro ATM, or three times at metro ATMs. After that there will be a Rs. 20 cash withdrawal charge, while other transactions such as balance checks will cost Rs. 5.