Are Payment Banks Really Worth The Hype?

The last few years have seen digitalization catch-up with the world at an incredible pace. With the demonetization of 2016, the currency shifted from the age-old physical form to a more digital model. With all these big movements going on, the trend of Payment banks began as well, to integrate digital currencies into our daily lives.

What’s a payment bank? Why should I even care?

A payment bank takes care of all the basic banking needs, just like a traditional bank, minus the facilities of extending credit or loans.

While on the surface it seems like another bank account to maintain, it’s majorly focused on the idea of cashless economy that is being advocated and promoted these days. They boast of features such as:

Zero Balance account:

The classic inviting concept of banks for customers who don’t want to keep funds locked up in banks. This is a great feature for people like students & the younger working class who’d like to use the bank primarily for payments, without having to tie in money.

Security:
The safety of your data is of great importance in today’s world. The payment banks operational today are all run by reputed players, who care a great deal about security. They have established infrastructure (ex: Paytm), and would be continuously upgrading their security measures to ensure hat you can bank without the security woes.

Interest:
Payment banks, following in the footsteps of traditional banks, allow you to have savings accounts, and earn interest on them as well. Indian Post’s & Airtel’s payment banks are offering interest rates of 5.5% on accounts these days, which is pretty much at par with the traditional banks.

Abundance of banking points:
Players like Airtel are working to set-up their mini-banking points at the existing Airtel stores spread across the nation. Meaning there would always be a mini-bank near you where you can walk in and bank at hours of your convenience, without long queues to bog you down.

While all may seem good at this point of time, there are things that you should take note of before you opt for the services of a payment bank, such as the limit on the amount that can be deposited. Capped at a maximum balance limit of Rs 1 Lakh for an account, it doesn’t really make a lot of sense for you to rely on this account for saving up your hard-earned money for the long haul.

So, are Payment banks really worth it?

Depends.

As a user, we need to set our priorities and preferences correctly, and view the payment banks as what they are – tools of convenience. Truth be told, they are the frontiers of the digital economy that the government is preaching and trying to build. So, it makes a lot of sense for you to bank with them if you are going to use them very often for making payments, since two of the major players, Paytm & Airtel, are actually known provider of convenience payment services. You can easily use the wallet facilities in conjunction with the bank accounts to make transactions, and that seems like the best use of these accounts.

For now, these bank accounts have their severe limitations and benefits of convenience. What upgrades we would see in the future in terms of their facilities will actually decide if they are actually worth relying on for majority of our banking needs.