Paytm founder slams banks, says they are rent seekers exploiting customers
While Paytm waits for final approvals from RBI to start its own bank, company founder Vijay Shekhar Sharma has slammed the traditional banks in the country, calling them rent seekers who seek to exploit customers by charging for even very small transactions. Speaking at India Today Conclave 2017 in Mumbai, Vijay Shekhar said small transactions such as moving money from one account to another should attract no transaction fee.
“The cost that banks put on the payments (is big). I don’t know… it’s your money, moving from your account to this account. Why it should be pricey and costly,” he asked. “There are rent seekers on the way, and there are people who make money just because it moves (from one account to another).”
Vijay Shekhar said that Paytm is different and that with its bank, that according to him is likely to start operations this month, the company will bring a much needed changes in the financial industry in the country. He said that instead of charging individual consumers and small merchants for moving money from one account to another, Paytm hopes to make money when the people spend their money to buy goods and services through digital transactions.
Vijay Shekhar’s comments on the transaction charges that banks levy came weeks after major banks in India decided to charge up to Rs 150 for cash deposits and ATM transaction once the free limit of four transactions in a month was over.
The Paytm founder also believes that the financial system in the world is loaded against people who play by the rule or do not possess the financial wizardry needed to navigate the complex set of rules and regulations that banks use. “I fundamentally believe that the world is broken for people who are sincere and hardworking. It happened with me. Personally my family is an example of it. financial systems are extremely penalising for extremely sincere people,” he said.
Although Vijay Shekhar is against the small fee that banks are charging for routine transactions, his company was also under fire recently when Paytm decided to levy 2 per cent fee on wallet recharge through credit cards. Although, the company said that the fee was supposed to be deterrent against the financial fraud that the company had noticed from some users. But after an outcry, Paytm rolled it back.
“With an intent to prevent the misuse of transfer to bank facility at 0 per cent, we had applied a refundable fee of 2 per cent on add-money through credit cards. At the same time, we are conscious that this move caused inconvenience to a large segment of our users, including those who are using their credit card for genuine transactions. Keeping the millions of customers and merchants interest as utmost priority, we have decided to suspend the 2 per cent fees and will continue to build a series of features to curb such misuse,” Paytm had noted in a blog.
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