Tata Communications arm eyes deals with payments, small banks

MUMBAI: Tata Communications Payment Solutions (TCPSL), which operates white and brown-label ATMs under the Indicash brand, is in talks with payments and small banks for use of its physical infrastructure in towns and villages as micro bank branches.
“We have 7,000+ white-label ATMs across 22 states and 4,000 locations. With payments banks and small banks readying their launch, they would rely on business correspondents for reach and, hence, would want to ride our physical infrastructure to expand rapidly,“ TCPSL chief executive officer Sanjeev Patel said.

The business correspondent model offers basic banking ser vices like remittances and deposits through a network of retailers, usually kirana shop ow ners or mobile recharge shops.While small and payments banks will primarily offer digital payment and remittance services, they would also require last-mile reach.

TCPSL, with its footprint in the country's interiors, hopes to cash in on this requirement and make its payments business more profitable.

Also, with new banking licences being rolled out, competition is likely to increase and prompt small banks to offer a bouquet of banking services like credit products. Indicash ATM rooms can serve as ultrasmall bank branches since a kirana shop owner would not be able to provide specialised banking solutions, Patel said.

“Our average room size is 150 sqft, where an agent can sit with a desk. It will be safe for specialised banking services also. The agent can also have access to the people visiting the ATM for cash withdrawal,“ Patel said.“Once a deal with a bank is done, the space would be branded with the bank's name and the ATM can be used by the bank's customers as well for unlimited cash withdrawal,“ he said.

TCPSL would enter into partnerships through the plug-andplay model, with flexible terms of engagement allowing banks to withdraw from the contract if they do not find the association profitable. It has already signed deals with Federal Bank and Solapur Janata Sahakari Bank and is in the process of getting a private and a public sector bank each on board, Patel said.