Paytm on Tuesday launched the Paytm Payments Bank in India, announcing the new unit via a public notice in newspapers and a blog post. After Vijay Shekhar Sharma secured an in-principle approval to start a payments bank in 2015, the Paytm bank was scheduled to commence operations around Diwali last year, but got delayed by several months. But with the Paytm Payments Bank finally operating, there are a few changes consumers would be introduced to, primarily the wallets business being transferred to the newly-incorporated entity Paytm Payments Bank Ltd (PPBL).
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.
- 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@example.com or visiting paytm.com/care to opt out and redeem your balance by transferring it to your bank account.
- 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.
- 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.
- 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.
- 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.
- There is no minimum balance requirement for the bank account. Also, online transactions (such as IMPS, NEFT, RTGS) will not have any charges.
- 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.
- Also, 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.
- 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.
- 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.
Notably, Paytm Payments Bank is not the only one of its type, or even the first, as the RBI had awarded the approval to set up payments bank to 10 others as well. So far, Airtel has gotten its payments bank running, with Paytm following suit now.
Disclosure: Paytm’s parent company One97 is an investor in NDTV’s Gadgets 360.