Fino Payments Bank is sharpening its focus on digital banking to spur growth, hoping to tap the market space caused by the exit of Paytm Payments Bank, formerly the largest player in this segment.
The rural focused bank aims to get about 15% of revenue this fiscal from digital banking, a sharp rise from 5-6% in FY24, said chief executive Rishi Gupta.
Following Paytm’s exit, Fino expects that inherent demand for quick digital credit and Unified Payments Interface (UPI)-based transactions will help the Mumbai-based bank enhance market share. Currently, about 1.5% of UPI payments happen via Fino’s platform.
“We have built our own in-house UPI settlement capabilities; now, we have an offline QR code-based payment strategy which can be deployed across 1.8 million merchants who work with us,” Gupta said.
Since December, Fino has deployed around 14,000 QR codes which reported 300,000 transactions valued at Rs 33 crore.
From getting its entire revenue from physical business, Fino processed 5-6% of its overall revenue through digital channels last fiscal. The management has set an overall revenue growth of more than 20% for FY25.
Fino’s two other private competitors Airtel and Jio Payments Bank are also looking to leverage the distribution heft of their associate companies to grab the market vacated by Paytm.
Jio Financial Services wants to open bank accounts with Jio Payments Bank while Airtel is pushing Fastags, QR codes and its savings accounts at competitive interest rates.
Last December, BSE-listed Fino had applied to the Reserve Bank of India to convert into a Small Finance Bank (SFB). Gupta said the regulator has not laid out the conversion principles yet, but the bank management is waiting to hear from the RBI.
Armed with the SFB licence, Fino wants to eventually expand its current and savings account propositions, offer fixed deposits, recurring deposits and improve its customer profile.
“We have more than 10 million active customers on our platform and around 40% of them are digitally active,” Gupta said.
Fino is also considering offering small ticket size merchant loans and products having strong demand among its users.
“We are doing around Rs 80 to 100 crore of monthly gold loan sourcing for our partner banks; we believe that there is demand for business and two-wheeler loans among our customers,” Gupta added.
While Fino wants to become the transaction account for its consumers, it is also building a strategy for business-facing functionalities.
“Within the B2B functionalities, we can partner with other entities for payments, credit sourcing, cash management; since we have our in-house tech now, we can scale up these partnerships and ensure data security as well,” said Tejas Maniar, chief digital officer, Fino Payments Bank.
The bank posted a 20% increase in total income in FY24 at Rs 1,478 crore. Net profit rose 33% to Rs 86.2 crore.
