Paytm Gets NPCI Nod To Become A Third-Party UPI App

New Delhi: Digital payments giant Paytm (One 97 Communications) received a critical lifeline on Thursday. The National Payments Corporation of India (NPCI) granted Paytm a third-party application provider (TPAP) license, enabling them to continue processing payments despite the closure of their banking unit, Paytm Payments Bank, on March 15th.

This vital license ensures continued functionality for Paytm users. They can seamlessly transition to using the Paytm app for UPI (Unified Payments Interface) transactions through partnered banks. Axis Bank, HDFC Bank, State Bank of India, and Yes Bank will serve as Paytm’s payment system provider banks, according to an official NPCI statement. Notably, Yes Bank will also handle merchant acquisition for both existing and new UPI merchants on the Paytm platform.

This move comes after regulatory action against Paytm Payments Bank for non-compliance with certain norms, leading to the need for swift migration of existing handles and mandates to new payment system provider banks.

UPI, India’s own real-time payments system, facilitates seamless money transfers across banks. Paytm, ranked as the third-largest UPI payment app in the country, processed 1.41 billion monthly transactions worth 1.65 trillion rupees in February. Despite a slight decrease from January, Paytm remains a significant player in India’s digital payments landscape.

This comes after the Reserve Bank of India (RBI) requested the NPCI to review Paytm’s application for a TPAP license last month.