Are e-Wallets Beginning to Worry Banks in India?
In the last week of October, Paytm founder Vijay Shekhar Sharma received a message from State Bank of India (SBI). It wasn’t good news. The message said the nation’s largest lender and its associate banks would no longer allow their customers to load money from their accounts onto the Paytm wallet.
“The reason that was given to us when we wrote back was that the net banking service was for shopping, not for uploading wallets,” said Sharma.
Paytm, run by One97 Communications Ltd, claims to have 100 million wallet users, who carry out more than 60 million transactions per month. Investors in the company include the Alibaba Group and its affiliate Ant Financial Services, SAIF Partners, Sapphire Venture and Silicon Valley Bank.
SBI’s affiliates include State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore. SBI did not respond to emails, text messages and phone calls seeking comment.
Users of the Oxigen wallet aren’t allowed by the payment gateways of SBI and Citibank NA to load their wallets, said Ankur Saxena, chief executive of Oxigen Wallet, offered by Oxigen Services India Pvt. Ltd. Occasionally, they encounter problems in loading money using SBI Maestro cards, too, he added.
From time to time, ICICI Bank Ltd’s net banking service prevents Oxigen’s wallets from being loaded on suspicion of fraud and does so after being reassured by Oxigen that the transaction is genuine, Saxena said. “As a responsible bank, we take various risk-mitigating measures to protect interests of our customers, largely in consultation with wallet owners. These may include temporarily stopping funding to certain wallets in extreme cases to prevent fraudulent transfer of funds through these wallets,” ICICI Bank said in an emailed response.