The Reserve Bank of India (RBI) has instructed the National Payment Council of India (NPCI) to review a request made by One97 Communications (OCL), the company behind Paytm and Paytm Payments Bank Limited (PPBL). If approved, Paytm will be able to handle UPI (Unified Payments Interface) payments through its app as a third-party application provider (TPAP).
Currently, Paytm uses PPBL to process its UPI payments. However, PPBL is shutting down on March 15th. This means that Paytm won’t have a TPAP registration to support UPI payments anymore. Becoming a TPAP means that Paytm can manage UPI-based payments on its app, including those for merchants and other apps using UPI. TPAPs like Paytm use NPCI’s UPI system and partner with banks and payment service providers (PSPs) to handle transactions. They need to follow guidelines and security standards set by NPCI.
RBI’s instructions mean that NPCI will review Paytm’s request. If approved, @paytm UPI handles will shift to partner banks to handle UPI transactions. During this transition, Paytm won’t be able to add new users. NPCI will select 4 to 5 banks to handle large UPI transactions, and OCL will set up settlement accounts with these banks for merchants using Paytm QR codes.
After March 15th, PPBL won’t accept deposits or process credits anymore. Therefore, users need to find alternatives before that date to avoid any trouble. More information can be found in the 14-point FAQs provided by RBI.
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