Paytm has launched the Paytm Payments Bank in India, announcing the new unit via a public notice in newspapers and a blog post. Renu Satti has been appointed the CEO of the new entity, and also sits on the payments bank’s board; Paytm CEO Vijay Shekhar Sharma is the non-executive chairman. With the Paytm Payments Bank finally operational, 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).
There seems to be some confusion around the Paytm payments bank, how it differs from the Paytm Wallet account, and what happens to the money in users’ wallets. Here’s everything you need to know about the new Paytm bank, how to open an account, and what you get by signing up.
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 protected] 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.
How to open Paytm Payments Bank account?
Opening a Paytm Payments Bank account is an option only for Paytm employees and associates as it is being rolled out as a beta. Paytm users can also request an invite to become account holders in the payments 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.
Paytm Payments Bank account features
Paytm bank offers cashback on deposits – 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.
4 percent interest rate – 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.
No minimum-balance requirements, no charges for online transactions – There is no minimum balance requirement for the bank account. Also, online transactions (such as IMPS, NEFT, RTGS) will not have any charges.
Paytm bank offers debit cards but no credit cards – 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.
ATM withdrawals on Paytm bank debit cards – 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.
Sharma had 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. 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.