With this licence, customers can still use the Paytm app to make payments through UPI even after Paytm Payments Bank shuts down on March 15 due to regulatory issues
The National Payments Corporation of India (NPCI) announced on Thursday that it has granted One97 Communications Ltd, the owner of Paytm, a third-party application provider licence, enabling it to facilitate payments after its banking unit ceases operations.
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With this licence, customers can still use the Paytm app to make payments through Unified Payments Interface (UPI) even after Paytm Payments Bank shuts down on March 15 due to regulatory issues.
In a statement, the NCPI said that Axis Bank, HDFC Bank, State Bank of India, and Yes Bank will serve as the banks providing payment system services to Paytm. Additionally, Yes Bank will act as a merchant acquiring bank for both existing and new UPI merchants for Paytm.
“YES Bank shall also be acting as merchant acquiring bank for existing and new UPI merchants for OCL. “@Paytm” handle shall be redirected to YES Bank. This will enable existing users and merchants to continue to do UPI transactions and AutoPay mandates in a seamless and uninterrupted manner,” the statement read.
Paytm founder Vijay Shekhar Sharma, who stepped down as chairman of Paytm Payments Bank Limited (PPBL) last month, welcomed NPCI’s decision.
“Thank you @NPCI_NPCI, committed to grow @UPI_NPCI to the new heights together @dilipasbe,” Vijay Shekhar Sharma wrote in his social media post on X.
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NCPI DIRECTION
The NCPI has also adviced Paytm to complete the migration for all existing handles and mandates, wherever required, to new payment system provider banks at the earliest.
UPI, owned and operated by NCPI, enables users to transfer money across banks.
Paytm, ranking as the third-largest UPI payments app in the country, processed 1.41 billion monthly transactions worth 1.65 trillion rupees in February. This was a slight decrease from 1.57 billion transactions worth 1.93 trillion rupees in January, according to NPCI data.
PhonePe and Google Pay hold the top positions as the two largest UPI payment apps in India.
Last month, the Reserve Bank of India (RBI) directed the NPCI to review a request from Paytm to become a third-party application provider.
(With inputs from Reuters)
