Payments and Paytm are inseparable for one who has inculcated the habit of smartphone-based payment options. Since Paytm has gone beyond wallet business via its payments bank and financial distribution services, the SoftBank-backed company is looking at various ancillary verticals to fortify its reach.
After announcing Paytm Money and a separate entity for selling insurance, the company is reportedly launching foreign exchange as well as cross-border payments.
Notably, it already has required approval from Reserve Bank of India (RBI) through its payments bank for facilitating cross-border payment and foreign currency exchange. According to an ET report, the Noida-based payments bank will begin with forex service and later usher into cross-border remittance service.
Currently, forex (commonly known as the foreign exchange) is a highly regulated service and requires RBI licence. Besides banks, only a handful of payments banks had got approval for engaging in forex business under the AD II category.
The yet to be launched service will essentially ease out the pain of exchanging currencies for inward and outward travellers. Importantly, it’s not clear whether such travellers can exchange currencies using Paytm Payments Bank app or not.
Exchanging currency at a physical outlet isn’t a challenge as it can be done with a little planning. In case, Paytm along with other payments banks (who have regulatory permission) bring forex service on apps then it would be worthy and instant.
If Payments Banks are eyeing to facilitate forex service only through their branches, then it doesn’t solve the travellers.
Besides Paytm, Jio, Airtel and Fino payments banks also have RBI approval to launch frex and cross-border remittance. Fino Payments Bank will also kick-off forex service over the next three months, mentions the report.
Presently, cross-border remittance market in India is estimated to be in the range of $6-7 billion. Majorly banks and PayPal are involved in carrying out global payments. Going forward, it would be exciting to watch – how new age payments bank will be disrupting the cross-border payment space.