Airtel PB records 49% dip in wallet numbers despite Paytm PB's downturn

The company however has registered a steady increase in transaction volumes

Notwithstanding Paytm Payments Bank’s downfall due to RBI crackdown -- which many believed would boost the prospects of its rivals --Airtel Payments Bank has trimmed about 49 per cent of its prepaid payment instrument (PPI) wallets between January and May this year, data from the Reserve Bank of India (RBI) shows. 

Deactivation of dormant zero-balance wallets was one of the key reasons for this sharp fall in PPI wallets of the payments bank arm of telecom major Bharti Airtel.

The Gurugram-based company had about 72.5 million PPI wallets in January, which is now down to 36.7 million outstanding wallets as of May 2024. 

 

“We recently completed a system optimisation effort by removing dormant zero-balance wallets. These were deactivated following adequate customer communications,” said Anubrata Biswas, MD and CEO, Airtel Payments Bank, in response to queries sent by Business Standard. 

However, the company’s transaction volumes with respect to PPI wallets have recorded a steady increase during the same period this year. 

In January, the company recorded transaction volumes of 6.05 million when it came to the purchase of goods and services using PPI wallets. It rose to 7.07 million in May, a 16.8 per cent increase in volumes at the end of the five-month period.

On the fund-transfers front, such transactions grew 38.6 per cent from 20,659 in January to 28,642 in May. 

Within the payments bank space, Airtel Payments Bank (Airtel PB) has recorded the steepest decline in PPI wallets even after Paytm PB suffered crippling restrictions from the RBI in January.  

Most industry participants had anticipated wallet numbers to move to Paytm PB’s direct competitors. 

Paytm PB had 630.7 million PPI wallets in January, which shrank by around 40 per cent to 380.5 million such wallets in May. 

Queries sent to Paytm PB did not elicit a response till press time. 

“The decline in a company’s PPI wallet numbers could also come from other reasons. The company may have taken on-board many users in a single time based on an e-KYC (Know Your Customer) or Aadhaar-OTP (One Time Password)-based KYC. However, after one year, such customers have to do a full-KYC, or close the wallet,” a senior executive with a payments major said, requesting anonymity. 

While most payments banks players have recorded a decline in wallet numbers, non-bank participants such as pure-play fintech companies have gained customers. 

For instance, Bengaluru-based fintech major PhonePe saw its wallet numbers increase to 199.3 million in May, a five per cent increase as compared to 189.5 million in January.

MobiKwik has seen a two per cent increase to 136.8 million wallets from 134.1 million during the same time. 

“People may sign up with new wallets only because they wouldn’t want to expose their bank account or their credit card to digital payments such as a Unified Payments Interface (UPI) for security reasons. They may feel that wallets are more secure given its smaller limits,” a payments executive said.