Paytm Is Accelerating Its Banking Push in India
Indian mobile wallet firm Paytm plans to launch its banking operations within two months, according to Bloomberg.
The news comes following approval from the Reserve Bank of India to launch digital banking operations as part of a “payments bank” initiative, which will allow 11 firms in India to accept deposits and pay out interest, but not loan money, as part of a push to expand access to increase access to mainstream financial services. The move could help Paytm continue to capitalize on rising tides following Indian demonetization late last year.
Paytm has been riding a wave since demonetization. Last November, India opted to withdraw the 500- and 1,000-rupee notes from circulation, demonetizing 86% of the country’s cash by value. That led consumers to flock to digital wallets, including Paytm, which saw 1,000% growth in money added to the wallet and a 300% rise in app downloads almost immediately. That growth has continued — the wallet has added over 20 million new users since November, and plans to onboard 5 million new merchants in 2017.
Adding banking services could increase engagement with the wallet and serve as a new customer-acquisition channel.