Pay Point aspires to be a universal bank: Meghani

Payment solutions company Pay Point India, which is awaiting Payments Bank licence, has said Sun Pharma’s ED Sudhir Valia will hold minority stake in the entity that aspires to become a universal bank in 3-5 years.

“Our aspiration is to deliver well as a Payments Bank and then in a three to five year window, to become a full service bank like any other,” Pay Point India’s co-founder and director Romil Meghani told PTI.

On Valia’s interests in the company, Meghani confirmed that the Sun Pharma Executive Director has agreed to pick up a stake, but clarified that he will not hold a majority stake in the Payments Bank as is being speculated.

“He will not be a majority stakeholder in the PB,” Meghani said, without disclosing any more details but added that a deal with Valia is imminent, irrespective of the outcome of its application for a PB.

“Even if we do not get a go-ahead for PB, we will have a transaction. Just that the terms will change. We are ready with drafts for both the scenarios,” he added.

Meghani declined to comment on whether there will be more shareholders in the bank, apart from Pay Point and Valia.

The Reserve Bank is right now assessing 41 applications it has received for PBs. Many of these aspirants, especially among conglomerates are looking at the PB as a gateway or a stepping stone to a full banking foray.

Meghani said his company, which already has a network of over 12,000 touchpoints, will go live as a PB with 3,000 touchpoints with the entire necessary infrastructure.

He said that this is not a capital intensive business and the investment will not go beyond the Rs 100 crore mandated by the RBI.

The company hopes to break-even in the first 18-24 months because of the asset-light model and the investments done by the company in the business over the last five years, Meghani said, stressing that it is the back-end technology which will do maximum work in minimum costs.

Apart from customer deposits and the interest which the company stands to earn on those, it is the fees which it stands to earn for carrying out every transactions which is a major pull factor, Meghani said, adding that cross-sell of various financial products like insurance policies and mutual funds will also accrue in revenues.

The company is confident of getting a PB license because of the geographies it serves, like North East and the Left Wing Extremism-affected Chhatisgarh, Meghani said, adding that it has 500 touchpoints in Assam alone.

“We also meet requirements like an existing PPI (prepaid instrument business) and also serve as a business correspondent,” he added.

The company will be rolling-out its mobile wallet within the next two months which will be a one-stop shop for everything from utility payments to travel bookings and also fund transfer.

Pay Point has served over 1 crore people in the last seven years and has worked with many institutions, including the country’s largest lender SBI, for whom Pay Point has also been opening accounts under the PMJDY.

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