India’s Mobile Wallet Companies Want Alternate Solution To eKYC

The PCI has asked the RBI to extend the deadline for converting minimum-KYC accounts to full KYC to February 28, 2020

The PCI has also proposed that a user with minimum KYC should be able to do P2P transactions of up to INR 10,000 a month

"In the event that the PPI industry may have to revert to paper-based KYC, we expect the cost of service to customers will increase manifold," the PCI said

Some of India’s top mobile wallet companies have requested the Reserve Bank of India (RBI) to provide an alternate solution to eKYC for user onboarding and verification. They said that the physical verification of user details for eKYC is increasing their costs and is a time-consuming process, especially in non-metro cities.

According to report, the Payments Council of India (PCI), an apex body representing companies in payments and settlement system, has also asked the regulator to extend the deadline for converting minimum-KYC accounts to full-KYC accounts to February 28, 2020, on account of the recent restrictions on the use of eKYC.

As per the updated norms issued last year, mobile wallets that conform to a minimum-KYC format (such as simple verification of mobile number) will have convert to full-KYC format. A minimum KYC is generally done via phones using OTP, while a full-KYC requires physical verification or a biometric check.

Soon after the norms were announced, MobiKwik committed $61.6 Mn (INR 400 Cr) over the course of five years to comply with the eKYC requirements of its customers. Paytm, on the other hand, earmarked over $500 Mn over a period of three years to reach a target of 500 Mn full-KYC wallet.

The PCI letter also proposes that a user with a minimum-KYC account should be able to do a peer-to-peer transaction up to INR 10,000 a month, on top of the $136.5 (INR 10,000) limit for making payments for products and services. At present, minimum-KYC wallets cannot send money to other wallet holders.

“In the event that the prepaid payments instruments (PPI) industry may have to revert to paper-based KYC, we expect the cost of service to customers will increase manifold. Besides the cost, it will be difficult to receive physical documents from rural areas and interiors of India and there may be inefficiencies related to its compliance. Hence, such an unforeseen increase in operating cost shall impede the growth of the PPI industry, which has worked relentlessly towards the proliferation of digital payments in the country,” the letter said.

Executives of digital wallet firms have said earlier that for interoperability (say, an Oxigen user sending money to a JioMoney user) to succeed, the accounts must be KYC compliant, wallet companies have argued that they invested heavily in building digital infrastructure for complying with RBI’s KYC mandate.

According to a report, the Indian mobile wallet market is forecasted to gain immensely during the forecast period of 2018-23 to reach around $7 Bn by 2023, with increased internet penetration and digital awareness leading the way.

Amazon Starts Storing Local Payments Data Without Mirroring It Abroad

Compliance with local laws and regulation is a top priority for Amazon, says spokesperson

Following the RBI’s April directive, several overseas payments companies are in a rush to comply with the rules

However, many other payments companies have demanded an extension on the deadline, which ended on October 15

Global ecommerce company Amazon has started storing local payments data in its servers in India without making a copy of it in its overseas servers, according to a ToI report that cited anonymous sources.

The Reserve Bank of India (RBI) had issued an order in April this year with a mandate to all payments companies operating in the country to store data relating to their customers within India. The move is geared towards ensuring that user details remain secure against privacy breaches.

Payments companies had requested that they be allowed to store a copy of the data outside India as well. However, the RBI shot down their proposal.

“Compliance with local laws and regulation is a top priority for us in all the countries we operate in. We continue to work closely with the regulator towards this,” Amazon spokesperson told Inc42 in an email correspondence.

Amazon’s payments business is largely run under its wallet, Amazon pay. The ecommerce company is expected to achieve complete compliance over the next two weeks.

Several overseas payments companies operating in India seem to be in a rush to comply with the rules. Although the deadline for compliance was October 15, some major payments companies have demanded an extension to comply with the RBI directive on data localisation.

Payments companies such as Visa and Mastercard have reportedly demanded 12-months extension. Even Google has sought a couple of months more to comply with the directive.

WhatsApp stores data locally but mirrors the same overseas, too. National Payments Corporation of India (NPCI) has reportedly said that the WhatsApp move of mirroring data will not be enough to comply with the rules.

As per The Wire report, 80 payments services providers in India have been told to store data locally, and not mirror it outside India, of which 64 are ready to store their data in India.

Payments companies like Paytm and PhonePe have publicly backed the RBI’s move.

Flipkart’s B2B And Ecommerce Arm Post A Combined Loss Of $435 Mn In FY18

Flipkart India recorded a total loss of (INR 2,063.8 Cr), which is a jump of more than 700%,

Flipkart Internet posted a consolidated loss of (INR 1,160.6 Cr) for FY18, a fall of 29%

Walmart has also set up a function called ‘Partnership Services’ to help Flipkart Group expand by leveraging its global scale and best practices

Global retailer Walmart-owned Flipkart has announced its financial results for both its B2B arm – Flipkart India and ecommerce platform – Flipkart Internet.

According to the documents sourced from Tofler, a business intelligent platform for India, Flipkart India recorded a total loss of $280.4 Mn (INR 2,063.8 Cr), which is a jump of more than 700%, as compared to $33.29 Mn (INR 245.04 Cr) in FY17. At the same time, Flipkart Internet posted a consolidated loss of $157.68 Mn (INR 1,160.6 Cr) for FY18, which is 29% less than the previous year’s $222.83 Mn (INR 1,640.2 Cr).

The combined loss of the two Flipkart entities — Flipkart India and Flipkart Internet—  was recorded as $434.7 Mn (INR 3,200 Cr) in FY18.

Here are some key statistics of the fiscal year for these entities:

Operational Revenues

• Operational revenue of Flipkart India saw a jump of 40% to $2.19 Bn (INR 21,438.65 Cr) in FY18 from $2.07 Bn (INR 15,264.42 Cr) in FY17
• For Flipkart Internet, the revenues from operations were $37.92 Mn (INR 279.2 Cr),  a 48.3% jump from $25.57 Mn (INR 188.24 Cr) in the previous year

Total Revenues:

• The total revenues for Flipkart India were (INR 21,657,6 Cr), against (INR 15,569.26 Cr) in the previous year
• Flipkart Internet’s total Revenue was (INR 3060.2 Cr), against (INR 2253.5 Cr)

Employee Expenses

• With huge sales, delivery promises to customers etc, Flipkart India spent $2.94 Bn (INR 331.54 Cr), a 99% jump from $22.63 Mn (INR 166.6 Cr)
• At the same time, Flipkart internet decreased its expenses on employees reaching $134.23 Mn (INR 988 Cr) from $140.38 Mn (INR 1032.8 Cr)

Net Worth:

• Flipkart Internet’s net worth for the fiscal year was $237.7 Mn (INR 1,749.80 Cr)
• The net worth for Flipkart India was $863.12 Mn (INR 6,353.60 Cr)

Flipkart’s holding company is registered in Singapore. The revenue of Flipkart Internet is mainly generated from services like seller commission and from the sale of products on the marketplace.

Flipkart Internet operates as a subsidiary of Flipkart Private Ltd. which is currently in a tough war with players such as Amazon India and Paytm Mall, among others. However, with Walmart acquiring Flipkart for $16 Bn, the ecommerce company is now preparing to touch the international markets.

Earlier this month (October 18), reports surfaced that Myntra has started selling its private brand named All About You at Walmart stores in Canada. All About You, launched in 2015, is a women fashion brand that’s endorsed by well-known Bollywood actor Deepika Padukone.

Walmart has also set up a function called ‘Partnership Services’ to help Flipkart Group expand by leveraging its global scale and best practices.

For now, Flipkart can be given the benefit of doubt, considering the period ending at March 31, 2018, as a battle of dominance with its arch rivals. With the Flipkart Group eyeing an IPO in possibly the next three years, and with a backing from global retail giant Walmart, now the financials for the next financial year are expected to clear the picture further.

KOOVS.COM goes offline now exclusively at Central

KOOVS.COM, the ultimate fashion destination in the country, has announced the launch of its first shop-in-shop presence exclusively at Central M.G Road, Gurugram. The launch saw Bollywood celebrity and fashionista, Kiara Advani walk the ramp in the brand’s latest collection marking the celebrations.

The brand is bringing alive the new trends in style through an aesthetic portrayal for the new age Indian consumers who have a global outlook and admire fashion in their everyday life

Recognized for bringing latest fashion off international runways for both men and women to the country, KOOVS.COM now gives all fashion lovers an access to the collection offline. Customers can touch and feel the quality of the products, try them on to understand their best fit and buy their products from the store and get it delivered at their doorstep.

Mary Turner, CEO KOOVS.COM, said “The brand is taking a step to get closer to our customer, by providing them the diverse range of the fresh fashion collection for both men and women. We are excited to see the response at the store and take customer interaction to the next level.”

The venue was turned into mini London representing brand’s aesthetics and inspiration, resonating European fashion history and impressions of uber chic design philosophy.

The brand is bringing alive the new trends in style through an aesthetic portrayal for the new age Indian consumers who have a global outlook and admire fashion in their everyday life.

Myntra launches its in-house plus size brand, Sztori

Myntra has announced the launch of Sztori, its in-house plus size apparel brand, especially designed to suit a larger range of body shapes and sizes. It is essentially a designer wear in the plus size category, offering consumers, the perfect fit and multiple style options at affordable rates. The apparel is made to suit plus size body types rather than prove to be a mere extension in size on existing profiles, thus breaking the existing age-old norm in the Indian market.

Myntra has announced the launch of Sztori, its in-house plus size apparel brand, especially designed to suit a larger range of body shapes and sizes

Post identifying a white space opportunity in the segment, Myntra set out to design and develop merchandise under a new brand to cater to the category and make wearers look fashionable with multiple style options at affordable prices, opening new avenues in the industry.

Known for democratizing fashion across segments, the launch enables Myntra to go a step further and include size profiles into the ambit of ‘fashion for all’. It champions inclusivity in fashion, evaluating and emphasizing greater attention to styles, trends, designs, fit and fabric for plus sized apparel, in order to bring out the personality of the person wearing it. ‘Sztori’ derives its name and theme from Myntra’s ‘story’ of developing a brand that celebrates a person’s journey and spirit, helping to soar above shape and size.

The brand offers a range of products for men and women, including, Tees, denims, tops, dresses and more in L to XXXXL (Large to 4 times Large) sizes. Shoppers can choose from over 225 styles and designs at prices ranging from Rs 799-1,999.

Speaking on the occasion, Manohar Kamath, CXO and Head, Myntra Fashion Brands, said, “We are extremely delighted to announce the addition of Sztori to our portfolio of private brands. Plus size clothing is in great demand and it was time we offered something substantial in the category, opening up more avenues and possibilities for our customers. Research estimates that this segment will account for US$ 5-6 billion in the US$ 40 billion Indian online fashion apparel market, by 2020, which is approximately 10-12 percent of the overall market, making it an important proposition.”

Nykaa bets big on the private label business; launches Ultra Matte Lipstick range

Nykaa.com, India’s largest multi-brand beauty platform, is betting big on the private label business which has seen a commendable growth in the last few years.

This year, the brand has been launching one new product every week

Elaborating on the growth story, CEO, FSN Brands, Reena Chhabra says, “We are very happy with the growth story of Nykaa private label. From last quarter to this quarter, we have grown almost 120 percent and from last year to this year, we have grown more than 250 percent. We have done extremely well in the last year due to increasing consumer demand.”

“We started the beauty advisor channel some time back and now we have about 40 stores in advisor channel. In distribution segment, we are present in 965 stores. We are also expanding our Luxe and On Trend stores. Recently, we have entered new markets like Kolkata, Bengaluru, Hyderabad and Coimbatore and next month we will be foraying into Guwahati,” she further adds.

USP

Within a few years of the launch, the brand has become a favourite among the Millennials.

“A lot more Millennials have been coming to our website and they have been telling us about trends and what we are doing is that we are listening to them and launching products that they have been telling us to launch,” reveals Chhabra.

“Another USP of Nykaa private label that has made the brand the first choice of the Millennials is that the quality and the price points that we are offering is much better than the competitors. Moreover, we ensure to provide colours that are really trendy and are in vogue,” she adds.

New Launches

This year, the brand has been launching one new product every week. Currently, it has launched Ultra Matte Lipstick range and it has already started getting great response from consumers.

Nykaa Ultra Matte Lipstick range is a tribute to the most iconic beautiful women that inspired the world with their original blend of grit, grace, glamour, and gravitas that echo far beyond the ages. Dedicated to all the women who changed the world with their enchanting beauty, sparkling wit and appeal, this collection speaks for women who are their own version of perfection.

In the words of Chhabra, “The colour we wear on our lips tells a lot about our personality and are a great way to express our own style. This collection is inspired by the iconic women of the golden era. Each lipstick shade name is inspired by one of these women, and reflects an inherent quality in her. Each shade has a different colour and a personality of its own.”

Future Plans

At present Nykaa private label contributes 10 percent to the overall revenue of Nykaa.com. The brand has been grown 200 plus percent year-on-year whereas the beauty market is growing by 17-18 percent.

The maximum contributor to the revenue are nails and lips. We are eyeing to be number three brand in India in cosmetics, says Chabbra.

“We will soon be available at Shoppers Stop, Lifestyle and New U. We are going to expand our Bath and Body range. We already have this range but we are now revamping it and soon that will come in a big way. Apart from this, we will also be expanding our perfumes and naturals range,” she asserts.

At present, Nykaa has more than 500 SKUs and by this fiscal end the brand is eyeing to add 200 plus SKUs.

“Average ticket size offline is Rs 600 size plus with an average basket size of 2.5 products and we have similar number on e-commerce,” reveals Chabbra.

The brand is eyeing 2,000 points of distribution by next year end and by this fiscal end it is expecting to reach 1,300-1,400 points of distribution.

Drug Controller Sends Notice To Amazon, Flipkart, IndiaMART For Selling Spurious Cosmetics

The notice has been served following the PAN India raids led by drug inspectors on October 5-6

The law provides for penal actions that may vary from monetary fine to imprisonment for sale of such "unapproved" products

DGCI had seized illegal cosmetics estimated to be worth $546K (INR 4 Cr) and lodged five FIRs

In a strict action against the sale of “spurious and adulterated” cosmetics, the Drug Controller General of India (DCGI) has issued notices to ecommerce giants — Flipkart, Amazon and IndiaMART — warning the companies of penal actions in case of failing to respond within 10 days.

The notice has been served following the PAN India raids led by drug inspectors on October 5-6, upon reportedly finding some indigenously manufactured cosmetics being sold without valid manufacturing licence and having ingredients imported without necessary registration certificates.

It is to be noted that the law provides for penal actions that may vary from monetary fine to imprisonment for sale of such “unapproved” products.

Among cosmetics being sold by these websites included imported brands that lacked valid documents and contained ingredients in the “negative list” of the BIS (Bureau of Indian Standards).

The DGCI has further warned them of penal action for “offering for sale, sale and distribution of spurious, adulterated cosmetics and cosmetics manufactured without a valid licence in contravention of the Drugs and Cosmetics Act, 1940.”

“In case you fail to submit the reply within the stipulated period, it will be presumed that you have no reply to offer and appropriate action as deemed fit will be initiated against you,” DCGI S Eswara Reddy said in the notice.

The Drug and Cosmetics Act mandates a registration certificate for the import of cosmetics into India, while all cosmetics manufactured in the country need to have a valid licence.

At the same time, cosmetics need to conform to the standards laid down by the BIS and cannot have any ingredient mentioned in its negative list.

Following the raids, DGCI had seized illegal cosmetics estimated to be worth $546K (INR 4 Cr) and lodged five FIRs across three cities — Mumbai, Pune and Delhi — against manufacturers who were making these cosmetics without a licence.

An Amazon India spokesperson said that the company takes strict action against sellers of “illegal or fake products” as and when such incidents are reported to it.

“Amazon.in is a third-party marketplace which enables sellers to list their products for sale to Indian customers. Sellers on Amazon.in own their respective products and are responsible for product compliances, as may be applicable.

“Amazon.in has a very high bar of customer experience and does take strict action against sellers who are selling illegal or fake products…in accordance with the due process of law, as and when such incidents are reported to us,” the spokesperson said.

An email query sent to Flipkart and IndiaMART didn’t elicit any response till the time of publication.

Regulators Getting Tough With Big Players

As more than 500 Mn Indians come online and rely on online service providers more for food, shopping, daily essentials etc, the regulatory bodies have picked up the time to pay attention to any infidelities happening with the customers.

Beyond trust issues, the regulatory bodies like the Food Safety and Standards Authority of India (FSSAI) took up the onus to ask the online food delivery platforms to remove those food business operators (FBOs) that didn’t have a license obtained from the regulator.

As a result, nearly 5K restaurants had been delisted by 10 online food delivery platforms including Zomato, Swiggy, UberEats, FoodPanda among others, as they did not possess the FSSAI license.

In the case of fake goods, Delhi High Court had recently ordered Amazon Seller Services to delist some sellers on its platform after a premium brand Beverly Hills Polo Club said they were selling fake products on Amazon.

With a close eye set on major players catering to Indians much closer now, the sellers of spurious and adulterated products may have a tough time ahead.

Supreme Court Bans Ecommerce Platforms To Sell Firecrackers This Diwali

Those who do not comply with the rules, may be charged with contempt of court

The offenders may have to face even monetary penalties

Several online retailers have already stopped taking orders online

As the festival of lights, Diwali is knocking at the doors, the Supreme Court has prohibited ecommerce players including Amazon, Flipkart and others to sell firecrackers online across India.

The Supreme Court has allowed only licensed operators to sell firecrackers, and has banned their sale online.

The bench constituting of Justices A K Sikri and Ashok Bhushan had also added that if any ecommerce platform doesn’t comply with the rule then it will be charged with contempt of court and also monetary penalties.

“No e-commerce websites, including Flipkart, Amazon etc, shall accept any online orders and effect online sales. Any such ecommerce companies found selling crackers online will be hauled up for contempt of court and the Court may also pass, in that eventuality, orders of monetary penalties as well,” ET quoted the bench as saying.

While speaking with Inc42, in response to the SC ruling, Radhika Ghai, Chief Business Officer and Co-Founder of Shopclues said, “Honouring the Supreme Court’s verdict, ShopClues has informed merchants not to list or sell firecrackers through the platform. We will be maintaining strict vigil and any merchant caught selling firecrackers will be reported to the authorities and will be banned from transacting on our marketplace”.

An October 2015 report by IndianOnlineSellers revealed that due to stringent license laws, the firecracker retailers turned towards online platforms in order to increase their reach. It was reported that even the grocery retailer like BigBasket was selling around close to 44 firework products on its platform.

We even found the existing urls on Google Search for both Flipkart and Snapdeal, redirecting towards the display page of firecrackers, which are no longer active now.

Also, there were some individual online platforms like crackermart, buyonlinecrackers, mycrackers.com, patakewala.com, FestiveZone and the Cock Brand which were selling firecrackers online till last year. However, it seems that after Supreme Court’s order, the platform has now been closed with immediate effect.

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When in October 2017, the Supreme Court issued orders of putting a complete ban on firecrackers only in Delhi, Tamil Nadu’s fireworks manufacturing hub of Sivakasi, one of many such manufacturing hubs, shared in a media a loss projection of more than $ 136.4 Mn (INR 1000 Cr). The overall fireworks market in India thus can be expected to be worth million dollars.

However, another fact here is , the firecrackers market is still largely dominated by the traditional offline segment.

“The Supreme Court was supposed to ban it. It was for the safety and protection of people. We accept the ban. We just have four to five percent sale online, a majority of the sales are from our offline stores,” said Alok Arora, founder, Patakawala.com, as quoted by MoneyControl.

Well, atleast this Diwali, some offline retailers might be at peace with the online domain!

Paytm Extortion Case: One Accused Admits Sonia Dhawan’s Involvement, Another Still On Run

Only Devendra Kumar has confessed to stealing personal data from Paytm founder Vijay Shekhar Sharma's mobile and computer and has admitted to Sonia Dhawan's involvement in the extortion plan

Sonia Dhawan has been working as the Secretary of Paytm chief Vijay Shekhar Sharma for 10 years

Sonia, along with three other accused, planned the extortion of INR 20 Cr

Update, October 26, 8.25am: Contradictory to what one of the members of the police investigation team from the Sector 20 police station, Noida, earlier told Inc42, it is only Devendra Kumar — one of the three accused arrested — who has confessed to stealing personal data from Paytm founder Vijay Shekhar Sharma’s mobile and computer and has admitted to Sonia Dhawan’s involvement in the extortion plan. The other two accused, Sonia Dhawan and her husband Roopak Jain, have so far claimed innocence. Details here. Following is the earlier story published by Inc42.

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Almost 24 hours after their arrest, the blackmailers of Paytm founder Vijay Shekhar Sharma — Sonia Dhawan, her husband Roopak Jain, and another Paytm employee Devendra Kumar — have confessed to their crime.

One of the members of the police investigation team from the Sector 20 police station, Noida, told Inc42 that Sonia, Roopak and Devendra have accepted the extortion crime charges imposed upon them. Kolkata resident Rohit Chomal, who is the fourth accused, is absconding.

It must be noted that Sonia was vice-president, corporate communications and public relations, of Paytm as well as the secretary of Vijay. She has been working with the Paytm chief for 10 years.

Paytm Extortion Case: For The Uninitiated

As Inc42 reported earlier, on the morning of October 22, police arrested Sonia, alleged to be the mastermind behind the extortion plan, and two of the other three accused in the crime. They had allegedly planned to extort INR 20 Cr ($2.71 Mn) from Sharma in lieu of stolen personal data from Vijay’s computer and mobile phone and were threatening to leak it.

An FIR was then filed by Paytm founder’s brother Ajay Shekhar Sharma, who reportedly received an extortion call from Chomal. Inc42 has the copy of the FIR filed.

According to the FIR, Sonia, Roopak, Devendra, and Rohit have been accused of extortion, fraud, humbuggery, getting illegal access of one’s personal mobile and computer data, threatening, among others against Sharma. The aim and intent was stated to be maligning Vijay and Paytm commercially and personally.

The accused have been booked under Indian Penal Code (IPC) sections 381, 384, 386, 420, 408, 120B, and 66A of the Information Technology (IT) Act.

• Section 381: Theft by clerk or servant of property in possession of master
• Section 384: Punishment for extortion
• Section 386: Extortion by putting a person in fear of death or grievous hurt
• Section 420: Cheating and dishonestly inducing delivery of property
• Section 120B: Punishment of criminal conspiracy
• Section 66A of IT Act: Punishment for sending offensive messages through communication service

How This Master Plan Was Executed?

As claimed in the FIR, Ajay and his brother Vijay received WhatsApp calls from Rohit on September 20 at 11 am and 4 pm, respectively. Rohit claimed to be in possession of some confidential personal data belonging to Vijay and demanded an amount of INR 20 Cr. He allegedly threatened the duo that he would make the sensitive personal data public in case of denial.

Rohit demanded that the amount be deposited in his ICICI bank account number 0006050215968, IFSC Code icic0000006. Ajay then deposited an amount of INR 0.67 Lakh and INR 2 Lakh in the said bank account on Oct 10 and Oct 15, respectively, the FIR claimed.

Later, Rohit called again, threatening Ajay and asking him to quickly arrange INR 10 Cr. At that time, Ajay was able to convince him to delve more information on the kind of data he had in his possession.

As mentioned by Ajay in the FIR, “Chomal told me that Sonia and her husband Rupak along with Devender wanted to malign the reputation of my brother and the company. Since she has the full access to Sharma’s mobile and laptop, she did the data theft unethically and pass on the data to Chomal for blackmailing us.”

The investigation is being led by investigating officer (IO) Manoj Kumar Pant.

Case Not A First In Indian Startup Ecosystem

Paytm founder Vijay and his family are not the first ones to face such alleged extortion demands from their employees in the Indian startup ecosystem.

Earlier this year, Flipkart filed a police complaint against one of its major suppliers, Macrowagon Retail (MRPL), and one of its employees for alleged criminal offences of cheating, fraud, forgery, and breach of trust. MRPL along with the Flipkart employee, designated to liaise with MRPL, were importing sub-standard products at a lower price while continuing to charge the rate agreed upon for genuine goods.

Last year, reports surfaced that two of Swiggy’s employees, in an anonymous blog post, accused Swiggy of cheating restaurants, users, and investors. Swiggy, however, hinted at foul play. Swiggy CEO Sriharsha Majety said that the company had “good reason” to disbelieve that its former employees were behind the anonymous post.

The Indian startup ecosystem, which was earlier battling various controversies, has now moved past them, but it is such criminals inside their teams that companies have to out watch for.

The Paytm case has so far revealed one side of the coin. However, it is difficult to understand what made well-earning, reputed employees of the company take a step like this, if at all. Was easy money the only reason or is there some deeper agenda hidden here?

For now, the startup ecosystem is left with another lesson of its lifetime.

Paytm Payments Bank Appoints Satish Kumar Gupta As Its New CEO

Gupta replaces Renu Satti, who stepped down as CEO of Paytm Payments Bank in July this year

Gupta has worked for more than three decades with the State Bank of India

Paytm Payments bank had set an aim to invest $500 Mn in KYC operations in order to reach 500 Mn bank accounts by 2020

In the middle of the controversies and tough times after Reserve Bank of India (RBI) asked the Paytm Payments Bank to stop onboarding new customers in June, the company has now appointed veteran banker Satish Kumar Gupta as managing director and CEO.

Gupta replaces Renu Satti, who stepped down as CEO of Paytm Payments Bank and took over as the chief operating officer (COO) of Paytm’s new Retail model.

Prior to joining Paytm Payments Bank, Gupta has worked for more than three decades with the State Bank of India. He then worked as the chief project officer at National Payments Corporation of India, which manages payment products like Unified Payments Interface.

“I have been fortunate to experience the disruption and growth that the Indian economy has witnessed in promoting digital payments. I look forward to leveraging my understanding of banking and payments at Paytm Payments Bank and aligning myself to its vision of bringing financial inclusion through digital payments,” Gupta said in a statement.

Launched in May 2017, Paytm Payments Bank is a mobile-first bank with zero charges on all online transactions (such as IMPS, NEFT, RTGS) and no minimum balance requirement. For savings accounts, the bank currently offers an interest rate of 4% per annum.

For the uninitiated, the payments bank is a bank operating on a smaller scale where it can perform most of the banking operations but cannot advance loans or issue credit cards.

The RBI guidelines state that payments bank are allowed to accept demand deposits of up to $1364 (INR 1 Lakh). It can also offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third party fund transfers.

Here’s a quick look at some of the recent happenings with payments banks:

• The Reserve Bank of India has lifted its ban on Mumbai-based Fino Payments Bank from onboarding new customers to open new accounts effective from October 22, 2018
• Mukesh Ambani-led Reliance Group’s Jio is also starting with live beta trials for its payments bank services dubbed as Jio Payments Bank
• In July, RBI lifted its ban on Airtel Payments bank and gave its approval to the company to start getting new customers
• PM Modi officially launched India Post Payments Bank (IPPB) on September 1
• RBI had given its approval for interoperability of prepaid payment instruments (PPIs) and has also issued guideline which will facilitate fund transfer from one mobile wallet to another
• Payments banks in India have deposited a total sum of $74.5 Mn (INR 540 Cr) as on May 2018

Paytm Payments bank had set an aim to invest $500 Mn in KYC operations in order to reach 500 Mn bank accounts by 2020.

With a target of setting up 100K banking touchpoints, the company is now actively leveraging Paytm’s 7 Mn offline merchant base to reach people in rural and semi-urban areas across the country.

Amazon Bids $400 Mn For 30% Stake In Spencer’s Retail

The deal with Amazon was believed to be in the penultimate stage but was held up due to valuation: sources

Spencer’s is reportedly looking for a better valuation than what Aditya Birla's grocery and retail stores chain More got

More is the fourth-largest supermarket chain in the country

US ecommerce behemoth Amazon has reportedly offered $400 Mn to Kolkata-headquartered Spencer’s Retail for 30% stake in the company. Another global e-commerce major Alibaba is also eyeing a minority stake in this food and grocery retail chain.

Spencer’s is a subsidiary of RP Sanjiv Goenka group’s flagship power unit,Calcutta Electric Supply Corporation (CESC). It runs 128 stores in over 30 cities across India, including 58 large-format, hypermarkets and supermarkets. Its revenue was reported to be $282.9 Mn (INR 2,091 Cr) in FY18. 

The deal with Amazon was believed to be in the penultimate stage but was held up due to valuation, Business Standard cited anonymous sources as indicating.

Amazon India didn’t respond to Inc42’s query at the time of publication, and Spencer’s declined to comment. 

Spencer’s is reportedly looking for a better valuation than what Aditya Birla’s grocery and retail stores chain More got. The ecommerce company along with private equity fund Samara Capital are reportedly co-investing in a facilities support and management and value-added services company called Witzig Advisory Services Private Limited, which has agreed to acquire More.

Aditya Birla’s grocery and retail stores chain More is the fourth-largest supermarket chain in the country and runs 490 supermarkets and 20 hypermarkets.

In December last year, Amazon also picked up a 5% stake in Shoppers Stop through its investment arm Amazon NV Holdings.

Meanwhile, Amazon also lost its bet on Kishore Biyani’s Future Retail. IT czar Azim Premji-led Premji acquired a 6% stake in Kishore Biyani’s Future Retail for $251 Mn (INR 1700 Cr) in a block deal.

Amazon has been aggressive in picking up stakes in Indian physical retail companies. Here’s a quick rundown:

• The US-based etailer received the final nod from the Indian government in July 2017 to invest $500 Mn in India’s food retail space.
• In July 2017, Amazon committed to investing up to $500 Mn in its food retail business in India.
• In June 2018, Amazon invested $1.5 Mn (INR 10.5 Cr) in its Indian food retail arm, Amazon Retail India, which is also a vendor on Amazon’s Pantry and Prime Now grocery offerings.

Amazon is also the first foreign company to start with its food retail venture in India and has already started with its pilot services in Pune. It may look at full ownership in some of the chains once the policies of the land in multi-brand physical retail is liberalised.