Worried about phone theft? Paytm plans to insure your wallet balance

Noida-based Paytm is in talks with leading insurance companies to provide a free insurance cover on the users’ wallet balance, the company said in a statement on Wednesday.

Under this initiative, the balance in their Paytm Wallets will be covered against fraudulent use.

Paytm's statement comes after a report in a leading daily claiming that wallets have declined a government proposal to offer insurance cover on wallet balances, given their limited revenue streams. Founder CEO of Paytm Vijay Shekhar Sharma said this in a tweet: "We never said No to this! We are actually negotiating our insurance policy for all Wallet users." 

Commenting on the announcement, Krishna Hegde, Vice-President at Paytm said, “This insurance cover on Wallet balance will ensure that the user is covered should there be any misuse of the account. This cover will provide additional comfort and security to our millions of users.”

Paytm has a current user base of more than 200 million while rival Mobikwik has over 55 million users.

Comment: An insurance cover over an e-wallet balance will definitely give a push to smartphone users to shift from regular banking channels to e-wallets for small transactions. It will ensure trust in the e-wallet system even as payment banks are expected to offer attractive interest rates over regular banks. It will also reduce e-wallet churn. Many merchants who shifted to digital currency are now uninstalling those apps, as cash becomes freely available in banks.