PTC Web Desk: Indian digital payments giant, Paytm, formerly known as One 97 Communications, has been granted a third-party application provider license by the country’s payments authority. This development comes as Paytm Payments Bank prepares to cease operations by March 15, following regulatory measures due to non-compliance with certain norms.
With the newly acquired third-party license, Paytm users can continue using the app for payments via India’s popular Unified Payment Interface (UPI). Notably, Axis Bank, HDFC Bank, State Bank of India, and Yes Bank have been designated as payment system provider banks for Paytm, as confirmed by the National Payments Corporation of India (NPCI).
Yes Bank will also serve as a merchant acquiring bank for both existing and new UPI merchants associated with Paytm. The NPCI has advised Paytm to expedite the migration of all existing handles and mandates to new payment system provider banks at the earliest.
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UPI, India’s real-time payments system, enables users to transfer funds across banks seamlessly. Despite a slight decline in February, Paytm remains the third-largest app for UPI payments in the country, processing 1.41 billion monthly transactions worth 1.65 trillion rupees. PhonePe and Google Pay lead the UPI payment market in India.
Last month, the Reserve Bank of India (RBI) instructed the NPCI to review Paytm’s request to become a third-party application provider. Following this, Reuters reported earlier this week that NPCI was likely to approve a third-party application provider (TPAP) license for Paytm, signaling a significant development in the Indian fintech landscape.
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