The National Payments Corporation of India (NPCI) has granted approval to One97 Communications Limited (OCL), Paytm’s parent company, to participate in UPI services as a Third-Party Application Provider (TPAP) under multi-bank model.
The license would allow Paytm to continue its Unified Payments Interface (UPI) services for its app users, after its banking unit Paytm Payment bank Limited (PPBL) ceases operations post March 15 following regulatory action.
Paytm will now provide the payment service in partnership with four new banks – Axis Bank, HDFC Bank, State Bank of India, Yes Bank – who will act as its Payment System Provider (PSP).
A PSP is a bank that helps the UPI app to connect with the banking channel. Only banks can act as PSPs.
Paytm, the third-largest app for UPI payments in the country, processed 1.41 billion monthly transactions worth Rs 1.65 lakh crore in February down from 1.57 billion transactions valued at 1.93 trillion in January, according to data available on the NPCI website.
For Paytm, the vast majority of transactions and around 75 percent of gross merchandise value (GMV) come out of its customers using the popular UPI for transactions on its app.
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