Indian digital payments company Paytm, formally known as One 97 Communications, on Thursday received a third-party application provider license from the country’s payments agency, which will enable it to facilitate payments after its banking unit ceases operations.
The license will allow customers to continue using the Paytm app to make payments through India’s popular Unified Payments Interface (UPI) after Paytm Payments Bank ceased operations on March 15 following regulatory action for non-compliance with certain norms.
National Payments Corporation of India (NPCI) said in a statement that Axis Bank, HDFC Bank, State Bank of India and Yes Bank will act as payment system provider banks for Paytm.
Yes Bank will also act as a merchant acquiring bank for Paytm’s existing and new UPI merchants, it added.
NPCI said Paytm has been advised to complete the migration of all existing processing procedures and instructions, if required, to the new payment system provider bank at the earliest.
UPI is India’s real-time payments system that allows users to transfer money across banks.
Data from the NPCI website showed that Paytm, India’s third-largest UPI payment app, processed 1.41 billion transactions worth 1.65 trillion rupees per month in February, down from 1.57 billion transactions worth 1.93 trillion rupees in January.
PhonePe and Google Pay are the two largest UPI payment apps in India.
Last month, the Reserve Bank of India (RBI) asked NPCI to review Paytm’s request to become a third-party app provider.
Earlier this week, Reuters was the first to report that NCPI may approve Paytm’s third-party application provider (TPAP) license.
© Thomson Reuters 2024
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