India’s National Payments Corporation of India (NPCI) approved Paytm’s request to join UPI as a Third-Party Application Provider (TPAP) on Thursday. This allows Paytm to facilitate payments through its app even after its banking unit closes per RBI’s order by March 15.
Regulatory action due to non-compliance with central bank norms led to Paytm’s troubles.
Axis Bank, HDFC Bank, State Bank of India, and Yes Bank will serve as payment system provider banks for Paytm, according to the National Payments Corporation of India (NPCI). Additionally, Yes Bank will act as a merchant acquiring bank for both existing and new UPI merchants associated with Paytm.
NPCI advised Paytm to swiftly migrate existing handles and mandates to new payment system provider banks.
Paytm, the third-largest UPI app in India, recorded 1.41 billion transactions worth 1.65 trillion rupees in February, down from 1.57 billion transactions worth 1.93 trillion in January. Paytm’s UPI approval follows a request to NPCI prompted by the RBI.
What did NPCI say about Paytm’s third-party app?
“NPCI stated that YES Bank will serve as the merchant acquiring bank for both existing and new UPI merchants associated with Paytm. The ‘@Paytm’ handle will be redirected to YES Bank, ensuring uninterrupted UPI transactions and AutoPay mandates for existing users and merchants.”
The regulatory authority also urged Paytm to promptly transfer all existing handles and mandates to new PSP banks as necessary.
What Paytm’s third-party app status entails for customers
The approval allows the use of the Paytm app for payments via the unified payment interface.
March 15 deadline for Paytm Payments Bank
After March 15, several Paytm services will cease due to RBI restrictions imposed on Paytm Payments Bank Ltd (PPBL) on January 31, 2024. PPBL cannot accept new deposits or top-ups post March 15.
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