The payments bank licence will act as a huge enabler for Vodafone M-Pesa, which has been working towards driving the financial inclusion agenda over the past few years. According to Suresh Sethi, Business Head, M-Pesa, Vodafone, with over 90,000 agents and more than 3.5 million customers, the company is already the largest business banking correspondent in the country.

What does a payments bank licence mean to you?

Vodafone India has been working towards driving the financial inclusion agenda over the past few years now. We believe that there is opportunity to include millions of Indians who do not have access to bank accounts, who don’t have a bank in their villages and want to be part of the digitalised economy, and want the ability to send money, buy goods and services through the digital economy. Payments bank licence will be a huge enabler. It will allow cash out without having a bank at the back-end. Being a payments bank gives us the big edge in terms of having the faith and trust of our customers. 

How different are you from other players who have received the licence?

Vodafone started its innovative M-Pesa (mobile telephone banking) service in Kenya in March 2007. The service was formally launched pan-India in early 2013. With over 95,000 agents and more than 3.5 million customers, we are already the largest business banking correspondent in the country. The payments bank licence will enable us to build on this further and offer a more comprehensive portfolio of banking and financial products and services, accelerating India’s journey into a cashless economy. We have already partnered with several government bodies to run pilots for enabling direct transfer of wages/subsidies. We remain committed to actualise the government’s vision of financial inclusion by leveraging the reach of mobile technology to service the unbanked and underserviced sections of society.

What are the advantages you have over existing banks, which have also taken various digital initiatives on the payments side?

The fact that four out of 11 payments bank licences have been granted to telecom operators, reaffirms the government’s belief in mobile penetration and distribution in India.

We aren’t competing with banks here, rather leveraging our distribution and penetration in India to drive the financial inclusion agenda. The focus is on empowering citizens who do not have bank accounts to be able to access basic banking services using their mobile phone connections. 

So, will you be able to offer payment services without tie-ups with any banks?

Yes, payments bank will allow you to do a lot more than what we could with a semi-closed wallet licence. It allows both cash-in and cash-out alone — and that’s a big capability. It allows to bring in international remittances. It allows selling third-party products like insurance and other semi-banking products. 

M-Pesa as a service brings the bank account/financial wallet to the customer’s pocket.

He no more needs to travel large distances to withdraw cash at a bank branch in his village or wait in long queues to send money to his family back home. M-Pesa has a widely distributed agent network both in metros and rural areas. When we started, we started by mapping the migrant worker corridor — Bihar, Jharkhand and West Bengal.

We first created the points where money can be received and then we developed our network in the urban centres like Delhi and Mumbai from where money is sent by workers. We are today pan-India but we have used telecom data to see where the STD calls are going. So, we have mapped areas where we can break distances in terms of availability of bank branches. Today, 60 per cent of our concentration is in rural areas.

How will you ensure that people use your touch points?

The combination of being a bank plus a mobile company allows us to reach out to the masses. We already have 95,000 such branches (agents) operating through our M-Pesa format. 

We disturb our products through 1.8 million retail outlets across the country and a majority of them, i.e., 60 per cent of these are in the rural belt.

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