Preferring normal banks he countered my statement asking Why? To which I explained :-
To bring the unbanked into banking fold the RBI could not have come up a better idea than launching payment banks. Payment banks are banks which involve in only cash deposits and withdrawals and would not be providing loans.
In its search for payments banks, RBI was eyeing for entities that had rural reaches.The Telecom companies, Wallets companies and the Indian Post Office scored a point as they had better mass reach than the others. To those who are following this closely it comes as no surprise that Airtel, Paytm, Indian Postal services and Aditya Birla’s Idea are among them who bagged 11 licenses and are on their way to start operations soon.
Patiently listening to me, he asked what is in it for digital wallets companies in this conversion? Keeping my coffee mug aside, I replied to my dear husband- “Firstly to diversify, secondly to give better service by make use of their customer base. ” Also once Wallet companies become payment banks they can offer bank like services ( saving… insurance, loans… and much more…)
In the last one year with so many wallets being launched, it is necessary that the wallet companies diversify to stay afloat or else they would perish. Having technological experience they can acquire customer bases in location where normal banks dare to go because of the cost involved in maintaining a branch and regulations required to be abide by them.
Also since the wallet companies already have customer bases at the places where there are no normal banks, it would be less expensive to work on them than opening a normal bank in such locations. With such diversification taking place in wallet companies there would be a positive growth in their earnings.
What about the wallet users? pat came the third question from him. Answering his question spontaneously my reply was :–
Seeing my husband’s frown turning slowly into a smile I realized that I was successful in convincing a tough customer. With a twinkle in his eyes he came up and said tomorrow we will discuss “Digital Wallets converted to Payments banks”. Our coffee time conversation ended with his words “Now that Whatsapp is the new entrant in the wallet space, soon a day will come when FB/Whatsapp will provide a platform to do banking transactions and solutions to buy utilities”.