NEW DELHI: The National Payments Corp of India (NPCI) is expected to grant a third-party application provider (TPAP) license to Paytm, officially recognized as One 97 Communications, by March 15, Reuters reported, quoting three sources on Tuesday.
Impact on customers and compliance issues
This license will enable users to continue utilizing the Paytm app for transactions via the unified payment interface (UPI) despite the impending halt in operations of its banking division, Paytm Payments Bank, by the same date due to regulatory concerns over non-compliance.
Understanding UPI and licensing process
UPI, managed by the NPCI, facilitates real-time financial transactions across different banks in India. Sources indicate that the TPAP license’s approval is anticipated before March 15, with most prerequisite evaluations already complete. They noted, however, that integrating with banks might extend beyond a month, but the license should be approved by the deadline.
Confidentiality and industry responses
The identities of the sources remain undisclosed as they are not cleared for media interaction. Responses from NPCI and Paytm to inquiries on the matter are pending.
Paytm’s UPI operations and partnerships
Reported declines in Paytm’s UPI transaction volumes in February are attributed to damages to the brand’s reputation. Nevertheless, transactions are expected to rebound following the license approval. Paytm is purportedly in talks to partner with prominent Indian banks such as Axis Bank, HDFC Bank, State Bank of India, and Yes Bank for UPI transaction processing.
Regulatory deadlines and restrictions
Sources suggest that the Reserve Bank of India (RBI) is not inclined to postpone the March 15 deadline for Paytm Payments Bank to cease its functions. Post-deadline, the bank will be barred from accepting new deposits into accounts or wallets.
(With inputs from agencies)
Impact on customers and compliance issues
This license will enable users to continue utilizing the Paytm app for transactions via the unified payment interface (UPI) despite the impending halt in operations of its banking division, Paytm Payments Bank, by the same date due to regulatory concerns over non-compliance.
Understanding UPI and licensing process
UPI, managed by the NPCI, facilitates real-time financial transactions across different banks in India. Sources indicate that the TPAP license’s approval is anticipated before March 15, with most prerequisite evaluations already complete. They noted, however, that integrating with banks might extend beyond a month, but the license should be approved by the deadline.
Confidentiality and industry responses
The identities of the sources remain undisclosed as they are not cleared for media interaction. Responses from NPCI and Paytm to inquiries on the matter are pending.
Paytm’s UPI operations and partnerships
Reported declines in Paytm’s UPI transaction volumes in February are attributed to damages to the brand’s reputation. Nevertheless, transactions are expected to rebound following the license approval. Paytm is purportedly in talks to partner with prominent Indian banks such as Axis Bank, HDFC Bank, State Bank of India, and Yes Bank for UPI transaction processing.
Regulatory deadlines and restrictions
Sources suggest that the Reserve Bank of India (RBI) is not inclined to postpone the March 15 deadline for Paytm Payments Bank to cease its functions. Post-deadline, the bank will be barred from accepting new deposits into accounts or wallets.
(With inputs from agencies)