SUMMARY
This move will enable HDFC Bank to become the payment service providers (PSPs) for Paytm for its UPI channel
Axis Bank and Yes Bank have already begun operating on the Paytm platform
Paytm secured the Third-Party Application Provider (TPAP) licence from the National Payments Corporation of India (NPCI) on March 14
Paytm’s parent entity One97 Communications Ltd is likely to onboard HDFC Bank as its third partner for migrating merchants on the fintech platform.
Moneycontrol reported the development first.
These merchants were onboarded on the Paytm app as UPI merchants by Paytm Payments Bank, which was asked by the Reserve Bank of India to shut services such as deposits, credit transactions and FASTag recharges from March 15.
This move will enable HDFC Bank to become the payment service providers (PSPs) for Paytm for its UPI channel. Nearly, 30 Mn merchants are currently active on the platform.
It is pertinent to mention here that Axis Bank and Yes Bank have already begun operating on the Paytm platform. As per media reports, discussions are also underway with Canara Bank and Kotak Mahindra Bank, with Canara Bank expected to roll out operations on the platform as early as next week.
Besides, State Bank of India is also expected to commence operations as payment service provider (PSP) banks for Paytm’s third-party application provider (TPAP) business, which manages the UPI consumer transactions. Paytm currently serves an estimated 90 Mn UPI users on its platform.
Paytm secured the Third-Party Application Provider (TPAP) licence from the National Payments Corporation of India (NPCI) on March 14.
With the licence, the fintech major can operate UPI services under a multi-bank model.
Paytm has been looking for partnerships with several banks to help its merchants seamlessly continue with Paytm’s offerings.
The RBI has put punitive restrictions on PPBL, but it’s allowing businesses and UPI users to keep using their Paytm handles, QR codes and machines for payments even after March 15.
Earlier this year the RBI announced a slew of curbs on the payments bank and barred it from taking any deposits, credit transactions, or top-ups in any of its customer accounts for “persistent non-compliance and continued material supervisory concerns”.
In addition, the apex bank barred it from offering other banking services, such as UPI facility and fund transfers, after February 29. Afterwards, it extended the timeline to March 15 for some of the restrictions.
