One 97 Communications Limited recently conducted a conference call on February 01, 2024, shedding light on the RBI’s directives to Paytm Payments Bank (PPBL), the company’s relationship with PPBL, and its future strategies. Here’s a breakdown of the key takeaways:
- Paytm users can utilize Paytm Payments Bank account balances until February 29, 2024, with restrictions on adding incremental money after this date.
- Paytm is severing ties with PPBL and actively seeking collaborations with other banks to reduce dependence on PPBL.
- Despite the challenges, Paytm has received support from prominent banks, ensuring the continuity of its operations and partnerships.
- Anticipates a worst-case annual EBITDA impact ranging from INR 300 crore to INR 500 crore, primarily affecting the wallet and merchant services.
- Estimated impact on payment-related revenues is expected to be less than 15-20%, with efforts to offset through net payment margin impact and other savings.
- Initiatives involve modifying QR codes for offline merchants and transitioning settlement accounts for online merchants to alternative banks.
- Temporary disruption in Paytm’s lending business due to changes in repayment accounts, affecting the origination of new loans.
- Actively engaging with other banks for partnerships and exploring options to offer alternative products to customers.
- Emphasizing its technological prowess, customer acquisition capabilities, and commitment to innovation despite structural changes.
- Migration efforts include finding partner banks, evaluating commercial aspects, and deciding on migration methods, with ongoing discussions with regulatory authorities.
- Paytm aims for a seamless transition, focusing on retaining merchants and users through proactive communication and partnerships with other banks.
- Minimal impact on Monthly Transaction Units (MTU) expected, given the dominance of UPI transactions over wallets.
- Paytm expresses confidence in mitigating the impact and offsetting factors over time, emphasizing its commitment to meeting migration timelines.
- Exploring opportunities for product expansion and partnerships with other banks after the regulatory embargo on Paytm Payments Bank.
- Demonstrating confidence in technology, customer-centric approach, and innovation as key strengths for future growth.