Inside the Paytm Payments Bank fiasco

There is no other way to say this. More than a year into it, the much-feted payments bank business in India is, pardon our French, a massive clusterfuck

Paytm wallet users on doing their KYC have mysteriously found themselves possessing a payments bank account too

The way consent is taken for opening a bank account is grey

Airtel Payments Bank after its run in with RBI and UIDAI last year is still in search of a business model

RBI and UIDAI's constantly shifting stance on KYC further debilitated payments banks' ability to acquire customers on top of their already crippled capabilities

There’s one story.

Mumbai, Maharashtra, March 2018

The Paytm wallet user wanted to complete his Know Your Customer (KYC). So he found a small-time telecom retail store with a biometric machine in Tardeo, south Mumbai, to get it done. At the store, the person at the desk began the KYC process. Ticking off one item after another on the KYC form that popped up on the phone. “I asked him, what are you marking off? Show me,” says the Paytm wallet user. “So, with the other consents, there was one for Paytm Payments Bank. I refused. The store owner then said that he cannot do KYC specifically for the wallet. The KYC has to be done for all services of Paytm. I did not give him the one-time password (OTP) and left the KYC process midway. Thugs.”

But one swallow doesn’t a summer make. So there’s more. Both summer and swallows.

Muzaffarpur, Bihar, March 2018

The Paytm wallet user wanted to complete his KYC. So, he was asked to go and do his biometric authentication at a small telecom retail shop, some two kilometres from his house. At the store, he gave his Aadhaar number. An OTP was generated, which he shared with the person at the desk. Then he put his finger on the biometric reader. He thought he was done, but the person at the desk said, wait, you will get another OTP. Voila! Another OTP arrived promptly. “This is when I got suspicious,” says the user [in Hindi]. “But I thought this must be some regulation. But then the man started asking questions, what is your income, father’s name, and I was like, why is he asking all this. The man was in a hurry and he started putting things on his own. Father’s name. M. Age: 25. And he said, okay done. When I reached home, I saw from the SMS that my Paytm Payments Bank account has been opened.”

Needless to say, the user went back to the shop. He was angry. He accused the shop owner of tricking him into opening a bank account he had no need for. “The guy said, sorry, I just work here and I have been asked to do two OTPs for everyone. I cannot close the bank account. Please complain to Paytm. So I complained with my reference number. After one week of following up, the account was closed. But the idiots have cancelled my wallet KYC also. I am never doing my KYC with them.”

We are in luck. There’s a third story. Bigger, better.

New Delhi, February 2018

The Paytm wallet user wanted to complete his KYC. So he visited the centre closest to him. At the shop, the checklist came up. Do you want to open a Paytm Payments Bank savings account.

AUTHOR

Arundhati Ramanathan

Arundhati is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She writes the newsletter Ka-Ching! every Thursday. She lives in Bengaluru and has spent 14 years reporting and writing on various subjects.

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AUTHOR

Ashish K. Mishra

Ashish edits and writes stories at The Ken. Across subjects. In his last assignment, he was a Deputy Editor at Mint, a financial daily published by HT Media. At the paper, he wrote long, deeply reported feature stories. His earlier assignments: Forbes India magazine and The Economic Times. Born in Kolkata. Studied in New Delhi – B.Com from Shri Ram College of Commerce, Delhi University. Works out of anywhere, where there is a good story to be told.

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