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Paytm Receives NPCI's Approval as Third-Party Application Provider

Paytm receives NPCI's approval as a Third-Party Application Provider, allowing it to operate UPI services under a multi-bank model. The move ensures continuity of services for users and merchants.

One97 Communications Ltd, the parent company of Paytm, has obtained the Third-Party Application Provider (TPAP) license from the National Payments Corporation of India (NPCI). This license allows Paytm to operate UPI services under a multi-bank model, with Axis Bank, HDFC Bank, State Bank of India, and Yes Bank acting as payment system provider (PSP) banks.

Seamless Transition for Users and Merchants

YES Bank will also serve as the merchant acquiring bank for existing and new UPI merchants using the "Paytm" handle. This ensures that users and merchants can continue to conduct UPI transactions and AutoPay mandates without interruption. NPCI has advised One97 Communications to complete the migration of all existing handles and mandates to new PSP banks at the earliest.

Joining the Ranks of Leading Payment Providers

With this license, Paytm becomes the 25th TPAP license holder, joining other major players like Google Pay, PhonePe, CRED, and slice. This development is crucial for Paytm, as it previously relied on PPBL for its banking operations. With the RBI's restrictions on PPBL, Paytm has swiftly partnered with other PSP banks to ensure continuity of services.

Strategic Partnerships for Growth

Following the regulatory action on PPBL, Paytm shifted its nodal account to Axis Bank and moved its merchant accounts to Yes Bank. These partnerships enable Paytm to onboard more merchants and users and explore cross-selling opportunities in the long term.

Relief Amidst Market Turbulence

The NPCI's approval comes as a relief for Paytm, as its shares have experienced a significant decline since the RBI's announcement of restrictions on PPBL. Despite challenges, Paytm is focused on maintaining uninterrupted services and enhancing its offerings to users and merchants.