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BENGALURU: Electronic payment companies like Paytm, Mobikwik, Itzcash and Oxigen are queuing up to explore the newly-introduced niche banking space which will ease digital money transfer and help e-commerce companies to expand into smaller cities and towns.
With 41% of unbanked population in India, payments banks are expected to provide them with access to electronic transactions, opening up an opportunity for electronic payment companies to expand significantly.
“The opportunity is significant but at the same time there are regulatory considerations that we will have to match up,” said Satyen V Kothari, managing director and founder of Citrus Payment Solutions. “Given the nature of the Reserve Bank of India and how the government works in India, the regulatory compliance part needs to be considered,” he added.
RBI recently published guidelines for payments bank licences, for which applications can be submitted till January 16, 2015. The regulator has hinted that licences are likely to be issued early next fiscal.
e-Commerce firms see it as an opportunity to grow customer base as it will increase the number of cardholders in the smaller towns. This will enable cardholders to transact online with ease and provide access to sites, making it a win-win situation for both businesses and consumers.
“RBI norms are encouraging. We are optimistic that with a platform like Snapdeal, goals of Snapdeal, goals of Digital India and financial inclusion will be possible,” said Aakash Moondhra, Snapdeal’s VP, finance.
Wallet companies, on the other hand, look at it as an opportunity to win customers’ trust, which might help this mode become an alternative to mainstream banking. “The consumers who are using wallets for the first time are becoming tech savvy ,” said Vijay Shekhar Sharma, CEO and founder of Paytm.