User complaints can have severe repercussions for any B2C business, particularly operating in the fintech sector where daily financial transactions are the norm. Paytm Payments Bank, owned by One97 Communications, has reportedly witnessed a massive surge in customer complaints during fiscal 2023, ending March 31, 2023. It’s important to highlight that these complaints surfaced well before the payment bank became subject to stringent regulatory measures by the Reserve Bank of India (RBI).
In the fiscal year 2023, Paytm Payments Bank reported a staggering 66,751 complaints across various categories, marking an alarming 150.1% YoY increase compared to fiscal 2022, where the reported complaints numbered 26,692.
The upsurge in complaints from Paytm Payments Bank’s customers became notably pronounced in fiscal 2021, witnessing an 80.9% YoY increase to reach a total of 25,988. This surge can be attributed to the impact of the Covid-19 pandemic during that period, prompting a sudden uptick in people using Paytm Payments Bank for online transactions. This abrupt surge in activity may have strained the company’s capacity, particularly as employees were working remotely. However, the subsequent fiscal year, FY22, saw a relatively modest 2.7% YoY increase in complaints.
It’s noteworthy that a majority of the complaints registered by Paytm Payments Bank were user-generated, and the bank typically resolved them within a responsive timeframe of five to six days.
Surge in Mobile Banking and Wallet Complaints
A closer look at the data reveals that over 58% of the complaints registered by Paytm Payments Bank in FY23 were related to Internet and mobile banking issues. This specific category amassed a total of 39,000 complaints, standing out as the highest among all the reported categories. Following closely were 8,974 complaints related to account opening and operational challenges. This upsurge in complaints is closely aligned with the broader context of operational challenges faced by Paytm Payments Bank in FY23.
Surprisingly, there was an eye-popping 300% YoY jump in mobile banking complaints in FY23, followed by 94% YoY growth in wallet-related complaints. The number of issues with accessing the Paytm Payments Bank accounts shot up over 700% YoY.
In March 2022, the Reserve Bank of India barred Paytm Payments Bank from onboarding new customers, citing “certain material supervisory concerns observed in the bank.” It is conceivable that this regulatory action may have contributed to customer difficulties in accessing accounts and opening new ones during fiscal 2023, starting from April 2022. The correlation between these events underscores the intricate dynamics between regulatory interventions, operational hurdles, and customer grievances for Paytm Payments Bank during this timeframe.
“This was the year when the bank was put under an embargo by the RBI, which could have caused a lot of problems for customers looking to open accounts or trying to access existing accounts,” said an industry insider in the know.
Airtel Payments Bank, a close rival to Paytm, reported a total of 445 complaints during FY23, with 95 of them specifically related to loading mobile wallets with cash. It’s important to note that Airtel Payments Bank, with approximately 72.5 million wallets, is considerably smaller in scale compared to Paytm Payments Bank, which boasted around 630 million wallets as of the end of January 2024.
In an effort to address all challenges faced by Paytm Payments Bank over the last two years, the founder, Vijay Shekhar Sharma, has made the decision to step down from the board. This strategic move is aimed at paving the way for a new board at PPBL, with the optimistic expectation that it will help alleviate tensions with the RBI and contribute to fostering a more positive image for the payments bank.
Additionally, the fintech company has forged partnerships with third-party banks, including Axis Bank, HDFC Bank, State Bank of India, and Yes Bank, to sustain its services following the impending ban, effective after March 15, 2024. It will be intriguing to observe how these decisions impact the future trajectory and reputation of Paytm Payments Bank in India’s fastest-evolving fintech sector.
