RBI Moves to Ensure UPI Transactions on Paytm Continue to Work After Strictures on Paytm Payments Bank

Feb23,2024



The Reserve Bank of India on Friday said it has asked the National Payments Corporation of India (NPCI) to examine the request of Paytm, formally known as One97 Communications, to become a Third Party Application Provider (TPAP). Said.

If approved, it will allow Paytm to continue processing payments through India's popular Unified Payments Interface (UPI), but will require a group of newly identified banks to support the app.

The RBI on Friday said NPCI should facilitate four to five banks with the capacity to process large volume of UPI payments to act as service providers for Paytm.

“No new users shall be added by the said TPAP until all the existing users are satisfactorily migrated to the new handle,” RBI said.

Last month, the central bank asked Paytm's affiliate Paytm Payments Bank to shut down its business by March 15, causing disruption for the popular payments app, which used a banking entity on the back end.

According to data available on the NPCI website, Paytm is the third largest app for UPI payments in the country, handling 1.6 billion monthly transactions. PhonePe and Google Pay are the two biggest.

RBI said that the company can open settlement accounts with one or more banks to keep the Paytm QR code operational.

Paytm last week said it has signed Axis Bank to act as its banking partner.

© Thomson Reuters 2024


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