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