Paytm: E-Wallet to Payments Bank

Abstract

In 2015, Paytm- India’s largest e-wallet had been pushed by RBI, the central bank regulator in India into becoming a Payments Bank. In 2018, it had come under the scrutiny of RBI for not abiding by the KYC norms and was also questioned over the cash backs offered to customers for bringing them on board. There were two other regulatory challenges that Paytm payments bank had to deal with. The Supreme Court of India had invalidated use of Aadhaar for online verification and the Payments and settlement Systems Act, 2018 was on the horizon. The case revolves around the future strategy to be adopted by Paytm Payments Bank to become self-sustainable and profitable given the regulatory and customer adoption challenges. To get a full picture, this case should be used in conjunction with the HBS case on Paytm that covers events till November 2016.