Having committed close to Rs 3000 crore over the next three years, this is how Paytm Payments Bank is using its existing resources to build an offline banking play.
Indian startups are known for their innovative approach to disrupt existing infrastructures and processes.
On Tuesday, the bank unveiled its ‘Paytm Ka ATM’ outlets that allow consumers to open saving accounts while depositing and withdrawing money from their Paytm bank accounts.
The company has fallen back to its massive merchant network (of six million), creating specially branded outlets which will bring banking access to smaller cities and towns.
Further, the company has also introduced a dedicated ‘Bank’ section on Paytm app where the entire range of banking services, including payments, digital debit card, passbook, along with assistance and support among others, will be available.
In the first phase of the launch, Paytm has already started with 3,000 ‘Paytm Ka ATM’ points in select cities, including Delhi NCR, Lucknow, Kanpur, Allahabad, Varanasi, and Aligarh.
According to the company, these outlets feature local banking correspondents who help customers in depositing and withdrawing money from their Paytm Payments Bank account.
The company states the example of an auto or taxi driver who can now visit ‘Paytm Ka ATM’ outlet to deposit his money into a Paytm Payments Bank Savings Account to earn interest and withdraw whenever required.
According to industry estimates, the cost of a teller machine (ATM) ranges anywhere between Rs 2.5 lakh and Rs 3.5 lakh or more on an average. This does not include the cost of maintenance, electricity, and requirements for its operations.
Over time, Paytm has elaborate plans of setting up over 100,000 Paytm Ka ATM banking outlets across India, expanding the reach of its banking services to the entire country, including the south and east.
As a part of the same, the company has committed Rs 3000 crores over the next three years to expand offline distribution network by allowing trusted local partners to act as potential cash-in and cash-out points.
Speaking on the occasion, Renu Satti, MD & CEO – Paytm Payments Bank said,
“The Paytm Ka ATM banking outlets is our step towards ensuring every Indian has access to banking facilities. This will enable our customers to visit their trusted neighbourhood outlet to open their bank account, deposit, and withdraw cash, in addition to getting their Aadhaar linked. We believe this hyper-local model of banking will play a crucial role in enabling hundreds of millions of under-served and un-served customers to gain access to quality banking services.”
Formally inaugurated last week by Finance Minister Arun Jaitley, Paytm Payments Bank claims to be charging zero fees on online transactions, and will soon launch 31 branches across the country.
At present, the company claims to have over 180 million savings and wallet accounts, as it vies to reach 500 million individuals over the coming years.
Account users can open their accounts through e-KYC, deposit up to Rs 1 lakh with no minimum balance requirement. The company is also planning to deploy free personalised RuPay digital debit card with every online transaction, including IMPS, NEFT, RTGS, and UPI being free of charge.
Sharing some growth numbers, Paytm had stated last week that it has close to 28 crore (280 million) registered users, 18 crore (180 million) wallet users, and has done 250 crore (2.5 billion) annual transactions and touched nearly six million merchants.
Tarush is driven towards delivering unbiased and accurate reportage while engaging with as many mediums as possible to narrate a fresh perspective. Working for the past few years in the digital space with YourStory, he has covered the Indian technology ecosystem extensively, focusing on new age Fintech companies, while building strong connects within the industry.