Post receiving the regulatory approvals, One 97 Communications, the parent company of digital payments provider Paytm, is preparing to merge its wallet service with the eponymous payments bank– the licence for which is owned by its founder Vijay Shekhar Sharma.
The Noida-based company had incorporated Paytm E-commerce Pvt Ltd and Paytm Payments Bank Ltd as separate entities in August 2016.
It may be noted that Paytm has been one of the main gainers in the push towards digital currency following Narendra Modi government’s move to demonetise higher value currency notes.
Wallet companies like Paytm have registered a spike in user base as well as the number of transactions.
One 97 Communications also operates an ecommerce marketplace, expected to facelift and serve as an entry path for online retail operations of Chinese ecommerce giant Alibaba, said sources.
Alibaba’s digital wallet Alipay is in a technology sharing partnership with Paytm. The combined entity of Alibaba and its subsidiary Ant Financial holds 40% stake in One 97 Communications, having invested about $680 million in the company.
The central bank has granted an ‘in-principle payments bank licence’ to Sharma, who holds a 51% share in the payments bank, with the balance owned by One 97 Communications.
The Chinese conglomerate Alibaba does not directly own a stake in the soon-to-be launched payments bank.