With two of the world’s leading conglomerates (Alibaba and Softbank) sitting on its board, Paytm is on road to dominating the Indian digital payments space with a number of bets in different verticals. Post announcing its foray into wealth management and insurance services as well as entering into cross-border commerce amongst other services, the digital payment company is now eager to set its foot in the foreign exchange and cross-border remittance space under its banking identity Paytm Payments Bank.
As per an ET report, Paytm has already received the authorised dealership (AD Category II) license from the Reserve Bank of India. Airtel, Fino and Jio Payments bank have also received the license. The license will help the payments banks in becoming full-service financial entities.
Foreign currency dealings are heavily regulated activities and entities have to be licenced by the RBI. While banks are classified under the authorised dealer (AD) I category, all others are licenced under the AD II category. According to the central bank, authorised money changers can offer services of foreign exchange to foreigners travelling in India as well as Indians looking for foreign exchange before embarking on a trip abroad.
While Paytm will initially start with foreign exchange services, it may enter cross-border remittance services, both outward and inward, as well in near term, as per the media report.
In this space, Paytm will compete majorly with PayPal. Also, Singapore based InstaRem recently launched its cross-border outward remittance services in India in partnership with the DCB bank.
Paytm denied commenting on the development when reached out by the Inc42 team.