Paytm launches payments bank, to invest heavily across all verticals
India’s Paytm group has launched its Payments Bank services and earmarked Rs 20,000 crore (approx $3.2 billion) investments to scale up its business across all verticals that include mobile wallet, recharge, bill payment services, e-commerce (Paytm Mall) and ticketing services.
The announcement comes immediately after talks of Japanese investor Softbank being the front runner to invest 1932 crore rupees ($300 million) in Paytm’s online marketplace Paytm Mall.
Apart from e-commerce the company is expected to infuse Rs 5000 crore (approx $771 million) into its digital wallet arm to further expand its presence in the country and Rs 3200 crore (approx $500 million) in KYC (Know Your Customer) operations of Payments bank.
Paytm after witnessing a surge in customers and transactions post demonetisation has been expanding aggressively across all verticals and strategically investing in acquisition, diversification of its business.
The company officially forayed into the financial services business with Union Minster of Finance, formally inaugurating Paytm Payments Bank India’s mobile-first bank on Tuesday.
Commenting on the launch Vijay Shekhar Sharma, Founder & CEO of Paytm in a statement said, “India is at the cusp of a financial revolution. The demography and access to financial services will create a ton of jobs in the country and Paytm is very proud to be a part of this financial services revolution. Paytm Payments Bank will work towards creating a massive number of jobs in the long run.”
"In the last 2 years and the next three years, we would have invested Rs 18,000-20,000 crore. I don't want to talk about profitability right now because we are still in an investment phase," Sharma added.
Paytm’s parent firm One97 Communications Ltd posted revenue of Rs 813.88 crore (approx $126 million) for the financial year 2016-17 with a net worth of the company at Rs 2,376.6 crore (approx $368 million).
Paytm did not disclose the profit or loss for the year but with strong backing from investors like Alibaba and Softbank remains unworried as its sole focus is on customer acquisition.
Paytm is targeting 500 million customers over the next 3 years and willing to suffer losses for the same. Currently, the company has around 218 million users with annual transactions worth Rs 80,000 crore (approx 12.8 billion).
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