Payment Banks

Compte Nickel!

Payment Bank licences are regulatory response of Reserve Bank of India, to technological innovation led by paytm in India, largest mobile commercial platform with value added services for consumers living in India's biggest cities. 

Mobile commerce is a recent phenomenon, with Apple, Square, Google Wallet. each player attempting to add their own version of commercial platforms in US market, while Alibaba is investing in paytm. 

RBI, has recently issued Payment Bank Licenses, with hefty capital requirements of INR 100 Cr. (almost $215 million), with License issued to list of big players from Telecommunication industry, including paytm, who has led the path for Mobile Commerce. 

Expanse of India is enormous considering a population of 1 billion, which has almost 800 million people living in the villages, and remaining 200 million in the cities. Where paytm has more than 100 million users, with ambition to have 500 million by 2020. 

This lead is definitely significant and telecommunications are just beginning to realize the potential and thus large moves. RBI plans to announce further provisions for smaller players as well. The space for Financial Services in India is on a move. 

Currently Payment Bank model is geared towards depositors who are spenders i.e. consumers. The model is not yet allowed by RBI to become lenders, which would be the next obvious step in world of Start Ups. 

For the RBI offers flexibility in the form of Non Banking Financial Companies, for those companies who may want to venture in offering finance in this space. With development of more mobile commercial platform, need for mobile financing may just get the Laptop, Smartphone and newer device purchases going. 

Interesting example of successful NBFC in mobile commerce is Compte Nickel of France. Which currently offers various kinds of Financing. Can innovation of this kind witness similar boom in India? Will GIFT City play a role in stimulating these activities??