In an exclusive interaction with Moneycontrol, CEO and MD of Airtel Payments Bank Shashi Arora said that the company will soon be integrating UPI payments for its account holders but will not issue plastic cards.
Priyanka Sahay & Harsimran Julka
India’s largest telecom operator Bharti Airtel Limited on Thursday launched its payments bank which will directly compete with incumbent wallet giant Paytm which has received a nod to open its Payments Bank this year.
Airtel Payments Bank CEO and MD Shashi Arora, feels confident of overtaking the incumbents in the market by on boarding Airtel’s current prepaid subscriber base.
“Given that we have 250 million customers on Airtel side, there's a large group that we can go for. We are not limiting ourselves only to Airtel customers. We will be on boarding any of the prepaid customers who find proposition to be relevant would like to do their banking services with Airtel Payments Bank,” said Arora in an interview with Moneycontrol.
India’s largest wallet player Paytm which is also likely to launch its Payments Bank in coming weeks has a current user base of more than 180 million.
Arora added that the bank’s strongest pitch will be accessibility at neighbourhood shop. The company will have 6 lakh banking points and will start its marketing campaign soon.
Airtel has announced an investment of Rs 3,000 crore in the bank along with Kotak Mahindra, the 20 percent shareholder in Airtel Payments Bank.
“Some bit of the investment will go into IT infrastructure, some bit of it will go into marketing and building awareness and some will go into distribution because we are talking about creating awareness at 600,000 banking points and 5 million merchant points,” Arora told Moneycontrol.
In contrast, Paytm claims to have about 2 million merchants on its platforms across the country.
No limit on withdrawal
Arora further added that there was a limit from RBI of Rs 24,000 but that was because of old notes.
“Now that the old notes have seized to exist from December 31, in that sense it is now notional. The second limit was at ATMs of Rs 4,500. But ours is through banking access points, so that limit also is not relevant,” he added.
He said Airtel Payments Bank will not issue physics debit cards.
“With any other bank account, you can't do merchant transaction straight from the account. But in a payments bank, the way we have rolled out, you can make payments directly from your account to a merchant etc. Therefore you don’t need a physical debit card. We will also get on the UPI bandwagon in a few weeks,” he added.
Taking on competition
Airtel operates its wallet called Airtel Money and thus won't be acquiring other wallets for an expansion strategy.
Answering a question by Moneycontrol, Sunil Bharti Mittal, Founder and Chairman of Bharti Enterprises said that Airtel has a much larger base than many wallets and it made no rationale for acquisitions of smaller rivals.
"Many wallet startups have approached us for acquisitions in past few months. We don't see any value in acquisitions," Mittal said.
Bharti Airtel has about 250 million subscribers in India nearly one-fourth of all telecom subscribers in India in contrast to Paytm’s 180 million users and Mobikwik’s 45 million users.
Airtel Payments Bank is currently onboarding about 25,000 accounts per day and plans to onboard about 100,000 more accounts per day starting this weekend.
As a launch offer, Airtel Payments Bank is offering a deposit rate of 7.25% and will deposit one minute worth of talktime for every rupee deposited in bank account by a user.
“Competition does enable newer things. Having said that, we have the first mover advantage and we have a lot of strengths, we will kind of play to our strengths,” Arora added.