On Thursday, one day ahead of the Paytm Payments Bank’s March 15 deadline for closing its doors, Paytm received a third-party application provider licence from the National Payments Corporation of India.
The license will give Paytm users another way to utilize its app for payments after its banking division, Paytm Payments Bank, shuts down by March 15 as a result of regulatory action for breaking certain rules.
Four banks—Axis Bank, HDFC Bank, State Bank of India, and YES Bank—will serve as One97 Communications’ PSP (Payment System Provider) banks, according to an NPCI announcement.
“YES Bank shall also be acting as merchant acquiring bank for existing and new UPI merchants for OCL. “@Paytm” handle shall be redirected to YES Bank,” NPCI mentioned in the press release.
The Reserve Bank of India (RBI) requested in February that the NPCI look into Paytm’s application to become a third-party application provider.
Previously, the Third-Party Application Provider (TPAP) license was held by the fintech company Paytm Payments Bank Limited (PPBL). Unlike its competitors, such as Google Pay, PhonePe, Cred, and Amazon Pay, Paytm was able to do away with the requirement for a separate TPAP license because to the availability of PPBL. The majority of transactions on Paytm (about 75% of gross merchandise value, or GMV) come from users utilizing the UPI to make purchases through the app.
