From e-Wallet to Payment Bank to Wealth Management, This Founder is Fast & Furious

Sharma sounded confident of a good distribution channel for cash flow and his focus on women to increase the bank's reach.

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The boss of India's biggest digital wallet is undeterred not only of competition but also for the success of his ambitious plans to make the launch of a payments bank by the company a hit.


Just a few days before the chief of India's second-largest lender, Aditya Puri, criticized the viability of business model of digital wallets such as that of Paytm's and questioned the promise of interest rates to the consumers by Paytm, its company chief revealed some of his thoughts to Entrepreneur.

At the Retail Leadership Summit in Mumbai, Sharma sounded confident of a good distribution channel for cash flow and his focus on women to increase the bank's reach.

Here are some of the excerpts from the interview.

Payment Bank Launch: When & How

We will launch the bank before February 28th. We have got the final license from RBI, preparations are done and still we are waiting for some approvals which are in process. Also, first we are working on setting up a good distribution channel for cash flow give and take.

On one side, we are obliged to serve the underserved and those who have bank accounts but not all facilities or face restrictions. We will convert our wallet consumers to those for the payment bank.

Women Key to Payment Bank Strategy

Paytm knows where to hit the nail, on its head.

With India's population exceeding 1.2 billion with nearly 200 million household, the company wants to cash on on the needs of women.

"We are specially focusing on women, at places where banks have not reached and where money is being lent out at exorbitant prices." There is a tremendous amount of tough and rough market which we call as Blue Ocean said Sharma.

Aim of 500 Mn Customers For The Bank

From the current 189 million wallet users, we are aiming to have 500 million consumers of wallet, current and saving accounts in Paytm's payment banks by 2020. The large number will be of current and saving accounts.

Wealth Management Services Offering

Paytm's ambitions aren't limited to just a bank. The company intends to launch its wealth management service just after a week post the launch of the bank.

How will it work? Sharma says by default, a consumer's Paytm savings account will be connected with his/her wealth management account. Whether consumers receive money via salaries or payments, they will begin to automatically start earning interest. This, Sharma, claims is Paytm's flagship and has never happened before.

Banks fundamental business model allows customers to earn deposits at a lower cost and convert them into assets. But with the Paytm business model, we cannot use those deposits into assets and hence we will be very diligent about giving more and more returns to the consumers.

Paytm Mall: How The Company Plans On Raising Funds

The company intends to raise INR 1,000 crore for its marketplace business Paytm eCommerce Pvt Ltd and from independent investors.

"We are raising money in an environment where people are not raising money and this is not all. There are tons of investors who have shown interests in our business model," claims Sharma.

UPI a Good Move

Sharma said the wallet companies more or less are independent unlike banks, who have launched payment wallets but have not seen much success.

Lauding the government's flagship BHIM application, Sharma said the launch of the app was a welcome move.

He, however, is unmoved by competition. "There was, is and always be competition but ultimately all of the digital wallets space growth has benefitted consumers," Sharma said.

(Edited by Aashika Jain)