Airtel Payments Bank, which has achieved 10 million customer base since launch, has tied up with Hindustan Petroleum Corporation Limited for enabling all its petrol stations that are typically cash surplus to be used as ATM points for customers of the bank. In order to grow scale and reach a larger customer base which may be unbanked, CEO Shashi Arora tells Gulveen Aulakh that the government should do away with the requirement of filling Form 60 for users who have annual income less than Rs 2 lakh.
Q: What is the most innovative feature that you’re doing at Airtel Payments Bank?
A: We’re rolling out UPI, and we would reflect in BHIM app as well, for that matter in any UPI enabled app. We’ve got 10 million plus customers, which has given us critical mass, which a new entity like us would need. We’re also announcing a tie-up with Hindustan Petroleum Corporation Limited (HPCL), which we would convert into banking points. The advantage would be that a customer looking for cash, apart from merchant payments, to do transactions. Many of these stations are cash surplus. For them to do cash withdrawal for us and work like an ATM is in advantage that we’re looking at, for which we’ve done the tie-up.
Q: What is the conversion rate from existing Airtel customers?
A: Of the customers we’re getting now, about two-third’s are coming from Airtel because there’s a brand association. The remaining third are new customers, and we think this share would increase going forward as there’s more awareness.
Q: What is the biggest hurdle that you face today, on operational or regulation level?
A: If a customer does not have a Pan card, he needs to fill and sign a Form 60. The kind of customers that we’re talking about (approaching), are the ones that don’t even have annual income of Rs 200,000 and these are customers that payment banks are mandated to go after. So, for banks like ours, some of these (requirements) should be just waived off. A lot of regulation looks at everything as all emcompassing, whereas for payments banks, there needs to be some degree of leeway or waiver, saying that these banks can operate in a slightly different manner.
Q: Would you want separate regulation for payment banks?
A: No, I don’t think that’s practical because financial world does need to be regulated. But some degree of exceptions can be made given the mandate that is there for payment banks, which is going after the bottom of the pyramid, the financially excluded. That customer – like an autorickshaw driver or landless farmer working on someone else’s land – is very unlikely to have participated in income tax, so there’s no sense in taking Form 60 from him, giving his annual income. These exceptions need not be for just payment banks, these could say that if you have an income of less than Rs 2 lakh, you don’t need a form.
Q: After 10 million users, what are the next targets APB has set for itself this year?
A: We have just begun our journey and our focus is to further deepen our service penetration and take banking closer to the customer both in urban and rural pockets. There are still over 250 million unbanked/under-banked people in the country and we believe that there is a massive opportunity out there.
Q: What are the level of transactions and average value of transactions being done at present and what are the targets for raising it this year?
A: We are clocking more than a million transactions per day and we expect this to grow in line with the growth of our customer base.
Q: How will APB ensure that people use the bank wallet to make transactions when so many are out there already? Will there be some incentives and if so, what will they be?
A: Our customers have access to various use-cases such are recharges, bill payments, utilities (electricity/water), merchant payments (offline/online) like Bookmyshow, PVR, Shopclues, BigBasket, Spencer’s, Café Coffee Day. We also run incentives like cashback etc. from time to time.
We are one of the few bank apps which offer a debit card in the app for online usage, customers find this very useful for transacting on sites like amazon, Flipkart and for paying cab aggregators like Uber and OLA.