24 May, 2017
Paytm’s Payment Banks- What Does The Change Mean?
Today, Paytm, the much-loved wallet, is moving to the Payment Banks model by setting up a branch in Noida. Payments Bank is a new bank model visualised by the Reserve Bank of India. As a Payments Bank, Paytm can now accept customer deposits upto Rs. 1 lakh per customer in a savings or current account and offer other banking services like Debit Cards, Online Banking and Mobile Banking. Payments Banks can not offer financial products of their own, but partner with other banks. Paytm offers an interest of 4% per annum which is less compared to other payments bank. However, a zero balance account can be opened and online transactions will not be charged.
Your interaction with the Paytm wallet may be limited to using it for Uber taxi travel payments, toll booths and payments to local shops and vendors. Hence you may have received an sms from Paytm informing you of the change.
What should you do with your Paytm wallet?
Your current Paytm Wallet will now move to the Paytm Payments Bank Limited in the same capacity. You continue to use the Paytm Wallet as before without any changes. The balance in your wallet will not earn any interest.
However, if you have not used your wallet in the last 6 months and you have zero balance, you will be required to login to your wallet again to move to the Paytm Payments Bank.
Do I have to open a Paytm bank account?
No, your wallet will simply operate under the Paytm Payments Bank and continue function in the same manner as earlier. In addition to a wallet, you can choose to open a savings or current account (for which you will have to complete KYC procedures). Currently opening an account with its Payments Bank can be done only on an invite-basis. The existing e-wallets will continue to be in existence and the cash balance remains in the wallets. Customers can add more cash to their wallets and continue with their transactions as before.
Can I close my wallet?
If a customer wishes to discontinue their Payments Bank accounts, they have to close their e-wallets as well. They need to contact the Paytm helpdesk- firstname.lastname@example.org and give details of their existing bank account number and IFSC code to close the account. Money in the wallet will be transferred to an alternative account.
You can also read the company blog post at https://blog.paytm.com/introducing-paytm-payments-bank-67214edfe0d1 for more details.
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