Paytm Secures Approval for Digital Payments Platform

Paytm Secures Approval for Digital Payments Platform

Time Stamp: March 15, 2024 8:10 AM
Paytm Secures Approval for Digital Payments Platform PlatoBlockchain Data Intelligence. Vertical Search. Ai.

India’s fintech firm, Paytm, has received approval to pivot
its operations towards a consumer digital payments platform, following
regulatory orders to wind down its banking affiliate, Paytm Payments Bank. This
development marks a transition for the company, ensuring continuity in its core
business amidst regulatory challenges.

The National Payments Corporation of India (NPCI) announced yesterday
(Thursday) that Paytm has been granted approval to operate as a consumer
digital payments platform, with support from prominent lenders including Axis
Bank, HDFC Bank, State Bank of India, and Yes Bank. These banking partners will
facilitate peer-to-peer transactions and Unified Payments Interface (UPI)
payments , leveraging India’s pioneering instant money transfer system.

Previously, Paytm operated under a license linked to its
affiliate, Paytm Payments Bank, which managed its digital wallets and payments
traffic. However, regulatory orders mandated the cessation of Paytm Payments
Bank’s operations due to continued breaches of rules, prompting Paytm to seek
alternative arrangements to sustain its business.

Bank Partnerships Emerge amid Paytm Payments Bank Closure

To mitigate the impact of Paytm Payments Bank’s
closure, Paytm has forged partnerships with other banks to fulfill its
operational requirements. Last month, a deal with Axis Bank replaced Paytm
Payments Bank as the backbone for its merchant payments settlement business.

The significance of UPI in India’s digital payments
ecosystem cannot be understated, with transactions worth 18.3 trillion rupees
processed in February alone. While companies do not directly profit from UPI
transactions, they leverage the platform to access a vast pool of consumers for
cross-selling services such as insurance and mutual funds.

India’s fintech firm, Paytm, has received approval to pivot
its operations towards a consumer digital payments platform, following
regulatory orders to wind down its banking affiliate, Paytm Payments Bank. This
development marks a transition for the company, ensuring continuity in its core
business amidst regulatory challenges.

The National Payments Corporation of India (NPCI) announced yesterday
(Thursday) that Paytm has been granted approval to operate as a consumer
digital payments platform, with support from prominent lenders including Axis
Bank, HDFC Bank, State Bank of India, and Yes Bank. These banking partners will
facilitate peer-to-peer transactions and Unified Payments Interface (UPI)
payments , leveraging India’s pioneering instant money transfer system.

Previously, Paytm operated under a license linked to its
affiliate, Paytm Payments Bank, which managed its digital wallets and payments
traffic. However, regulatory orders mandated the cessation of Paytm Payments
Bank’s operations due to continued breaches of rules, prompting Paytm to seek
alternative arrangements to sustain its business.

Bank Partnerships Emerge amid Paytm Payments Bank Closure

To mitigate the impact of Paytm Payments Bank’s
closure, Paytm has forged partnerships with other banks to fulfill its
operational requirements. Last month, a deal with Axis Bank replaced Paytm
Payments Bank as the backbone for its merchant payments settlement business.

The significance of UPI in India’s digital payments
ecosystem cannot be understated, with transactions worth 18.3 trillion rupees
processed in February alone. While companies do not directly profit from UPI
transactions, they leverage the platform to access a vast pool of consumers for
cross-selling services such as insurance and mutual funds.

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