(Last Updated On: June 8, 2021)
Payment Banks are small institutions that enable easy banking. Your phone service provider or digital wallet can become a BANK!
What Can You Do at Payment Banks:
- Deposit up to Rs.1,00,000 only
- ATM, Debit Card services
- Buy Mutual Funds and Insurance
- Mobile Banking services (transfer money, receive payments etc)
- No loans or Credit Cards
Should your small business get a Payment Bank Account?
Have you been thinking about getting a payment bank account? Here are the pros and cons of opening an account with payment banks:
The Good
- If you have 5-6 employees, you can open salary account instead of paying in cash
- Higher interest rate on savings account – around 7%
- Simpler KYC norms
- Banking services at doorstep
- Risk of fraud low because of capped deposit balance
- Zero balance account
- Cashback and discount offers (acts as wallet+bank)
The Bad
- No credit availability
- Existing banks already offer services like payment banks (ICICI Pockets etc)
- RBI can revoke a payment bank’s license fairly easily than a regular bank
- You cannot make investments via payment bank account.
- Your mobile number is not your account number. Collecting payments would be a hurdle.
Payments Bank Account – Yay? Or Nay? Tell us what you think in the comments. Want an easier way to collect payments online? Try the Instamojo experience today!
