One97 Communications Limited (OCL), the parent company of Paytm, has been given the green light by the National Payments Corporation of India (NPCI) to function as a Third-Party Application Provider (TPAP) for Unified Payments Interface (UPI) services.
Key Points:
- Paytm’s banking unit, Paytm Payment Bank Limited (PPBL), is set to discontinue operations post March 15 due to regulatory actions. However, Paytm will continue to offer UPI services through the TPAP license.
- Four major banks, including Axis Bank, HDFC Bank, State Bank of India, and Yes Bank, will collaborate with Paytm as Payment System Providers (PSPs) to facilitate the UPI service.
- NPCI has advised Paytm to ensure the smooth migration of existing users and merchants to the new PSP banks to prevent any disruption in UPI transactions.
- Yes Bank will serve as the merchant acquiring bank for Paytm’s existing and new UPI merchants, and the @Paytm handle will be directed to Yes Bank.
Implications:
- Paytm, a prominent UPI payment app in India, will be able to sustain its UPI services despite the closure of its banking unit.
- Partnering with multiple banks strengthens Paytm’s UPI infrastructure, ensuring seamless transactions for its users and merchants.
- NPCI’s approval highlights the continued growth and importance of digital payment platforms like Paytm in India’s financial landscape.
With NPCI approval, Paytm is positioned to maintain its status as a key player in India’s digital payment arena. The collaboration with leading banks underscores Paytm’s dedication to providing secure and efficient UPI services to millions of users nationwide.
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