RBI orders NPCI to examine Paytm’s application for Third Party App Provider

The Reserve Bank of India on Friday unveiled additional steps to guarantee that UPI users utilizing the @paytm handle run by Paytm Payments Bank continue to make easy digital payments even after the deadline of March 15th to stop adding money to their bank accounts and wallets.

The RBI has directed that One97 Communication’s (OCL) application to become a Third Party Application Provider (TPAP) for the UPI channel on the Paytm app be reviewed by the National Payments Corporation of India (NPCI).

“It has been further advised that in the event of NPCI granting TPAP status to OCL, it may be stipulated that ‘@paytm’ handles are to be migrated in a seamless manner from Paytm Payments Bank to a set of newly identified banks to avoid any disruption. No new users are to be added by the said TPAP until all the existing users are migrated satisfactorily to a new handle,” stated RBI in a press release statement.

According to the existing legislation, in order to provide UPI services and facilitate merchant transactions through partner banks, Payment Service Providers (PSPs) must get a TPAP license from NPCI. Currently, twenty-two companies hold TPAP licenses, including Google Pay, Amazon Pay, Mobikwik, PhonePe, and WhatsApp.

RBI has also instructed NPCI to certify four to five banks as payment service providers that can handle significant volumes of UPI transactions in order to work with Paytm and reduce the risk of concentration. The supervisory body has reaffirmed that clients who have an underlying account or wallet with Paytm Payments Bank had to arrange other banking arrangements well in advance of March 15.

It has also been instructed for holders of National Common Mobility Cards (NCMC) and FASTag issued by Paytm Payments Bank to make other arrangements before to the deadline.