Paytm has always been at the forefront of the digital revolution in India supported by a huge group of merchants and consumers.
There has been a dilemma regarding the use of Paytm over the last one month. This led to confusion among users and marchents, even an impact in share market performance. However, with the action taken by National Payments Corporation of India (NPCI), Paytm got relief from turmoil. Yesterday, NPCI “granted approval to One97 Communications Limited (OCL), Paytm's parent entity, to participate in UPI services as a Third-Party Application Provider (TPAP) under multi-bank model,” as per press release.
The statement further mentioned that: “The license would allow Paytm to continue offering Unified Payments Interface (UPI) services to its app users, after its banking unit Paytm Payment bank Limited (PPBL) ceases operations post March 15 following regulatory action.”
Under the new regulations, Paytm will continue to provide the payment service in collaboration with four new banks namely Axis Bank, HDFC Bank, State Bank of India, and Yes Bank. These banks will act as Payment System Provider (PSP) for Paytm from now on. Generally, PSPs help any UPI app to connect with banking channel. In india, only RBI-registered banks can act as PSPs.
Previously, Paytm was operating all their financial service through Paytm Payments Bank (PPBL), which was their own bank service. Paytm’s rival apps like Google Pay, PhonePe, Amazon Pay, or Cred used to operate through Third Party Application Provider or TPAP license.
Yesterday NPCI further noted: “With this, the Paytm handle would also be redirected to Yes Bank. This will enable existing users and merchants to continue to do UPI transactions and AutoPay mandates in a seamless and uninterrupted manner.”
Paytm, started in 2017, is the third-largest app for UPI payments in India. As per the data available on the NPCI website, “Paytm has processed 1.41 billion monthly transactions worth Rs 1.65 lakh crore in February down from 1.57 billion transactions valued at 1.93 trillion in January,” amid the confusion.
However, till now, people have many misconceptions regarding the Paytm payments. Let's find the facts over rumours.
Fact: The Paytm app and its services will remain functional. Most of the Paytm services offered are in collaboration with different banks apart from its associate bank – Paytm Payments Bank Limited.
Fact: This is completely false. Paytm’s merchant payment services will continue to work. Paytm’s offline merchant payment network services including Paytm QR, Paytm Soundbox, or even Paytm Card Machine, will operational just like earlier. Since 2021, Paytm started working with other banks which is believed to enhance in coming years with NPCI licence.
Fact: Although there were lot of rumours, but, with the nod from NPCI, Paytm will continue to provide UPI and other banking services. According to NPCI: “Yes Bank shall also act as a merchant acquiring bank for existing and new UPI merchants for Paytm.”
Fact: There won’t be any effect on user’s deposits in their Paytm Savings accounts, Wallets, FASTags, or NCMC accounts. Paytm CEO mentioned the directives from Reserve Bank of India are on Paytm Payments Bank (PPBL), it will not have any impact on Paytm.
Fact: This is certainly a false notion. The invested money by paytm users’ in Paytm Money are safe. Paytm Money Limited (PML) is totally SEBI-regulated and completely compliant.
So, users don't have to worry about Paytm anymore as it will continue to provide all the previous services.
