Paytm Gets Third-Party UPI App License From NPCI as Payments Bank Ceases Operations

The license will allow customers to continue using the Paytm app for payments through India's popular unified payment interface (UPI).

By Reuters | Updated: 15 March 2024 10:50 IST

Paytm Gets Third-Party UPI App License From NPCI as Payments Bank Ceases Operations

Photo Credit: Reuters

Axis Bank, HDFC Bank, State Bank of India and Yes Bank will act as payment system provider banks to Paytm

Highlights

Yes Bank will act as merchant acquiring bank for UPI merchants for Paytm
Paytm is the third-largest app for UPI payments in the country
Paytm Payments Bank has to cease all operation by March 15

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.

Paytm Payments Bank Said to Cut About 20 Percent of Staff Ahead of Halt

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 Payments Bank Hit With Penalty of Over Rs. 5 Crore by FIU

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.

Is the Samsung Galaxy Z Flip 5 the best foldable phone you can buy in India right now? We discuss the company's new clamshell-style foldable handset on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.