Digital push: The bank will build the most dominant KYC-compliant wallet and payments bank, says Ms. Satti | Photo Credit: AP
To comply with new RBI norms, it will invest $500 mn in KYC infrastructure
Paytm Payments Bank expects the new stricter Know Your Customer (KYC) norms, set by the Reserve Bank of India (RBI) for digital wallets, to boost customer acquisition process for its banking operations, a top company official said.
“A single KYC done by us will be valid for wallet, bank as well as other financial services,” Renu Satti, MD and CEO, Paytm Payments Bank, told The Hindu.
“This will give us a significant edge over standalone wallets… The new guidelines will have a positive impact on our bank’s KYC customer acquisition efforts. We are already meeting more people for wallet KYC, and they will now be willing to have bank accounts with us,” Ms. Satti said.
Under the new rules, existing wallet users have to convert to the full KYC format by the year-end, following which, these wallets will cease to exist. Many industry players had said the norms may have a negative impact on the industry as they would take away the ease and convenience of using such a mode of payment, particularly for low usage accounts or small value transactions.
Ms Satti said the company was “aggressively” converting minimum KYC customers to full KYC wallets for which it would hire additional 10,000 people and invest $500 million.
“We will be investing $500 million into KYC operations to build the most dominant KYC-compliant wallet and payments bank in the country,” she said, adding the firm currently had a workforce of 10,000 people who aggressively reach out to customers for their KYC.
“We are also hiring an additional 10,000 to scale our operations. We are getting ready with more than one lakh banking outlets and KYC points to expand our network across the country,” Ms Satti said.
To a question on the longevity of digital wallets in the context of modes such as UPI, she said while wallets were a great instrument for personal remittances, “it will be challenging for standalone wallets as this will have higher customer acquisition costs.
“The Paytm Wallet is being complemented with the Paytm Payments Bank account. This will enable our customers earn interest on their deposits in the bank account,” she said.
Under the new rules, existing wallet users have to convert to the full KYC format by the year-end, following which, these wallets will cease to exist
Ms.Satti said in the coming months, Paytm Payments Bank will offer full set of financial services, including wealth management and lending.
On RBI guideline to close wallets with zero balance for a year, she said the move will help weed out inactive users and bring in more efficiency into the system.[“Source-thehindu”]