Paytm Shifts UPI Users to Partner Banks Amid Regulatory Changes

18 Apr 2024 , 10:57 AM

One97 Communications Limited (OCL), the parent company of Paytm, has initiated the process of migrating its customers to Payment System Provider (PSP) banks such as Axis Bank, HDFC Bank, SBI, and Yes Bank. This move comes after receiving approval from the National Payment Corporation of India (NPCI), indicating a strategic shift in Paytm’s operational framework.

The transition is necessitated by regulatory constraints imposed by the Reserve Bank of India (RBI) on Paytm Payments Bank Limited (PPBL), preventing it from engaging in certain business activities.

Historically, Paytm’s UPI customers have utilized services offered by Paytm Payments Bank Limited (PPBL). However, regulatory restrictions prompted Paytm to seek alternative arrangements for its users.

On March 14, 2024, OCL obtained NPCI’s approval to function as a Third-Party Application Provider (TPAP), signaling a significant milestone in its operational evolution.

Following NPCI’s approval, Paytm expedited its integration with Axis Bank, HDFC Bank, SBI, and Yes Bank, all of which are now operational on the TPAP platform. This integration streamlines the process for Paytm to transition user accounts to these PSP banks, ensuring a smooth and seamless experience for its customers.

Notably, the migration process involves transitioning ‘@paytm’ handle users to these partner banks, facilitating uninterrupted UPI payments. As part of this transition, users’ existing UPI IDs with ‘@paytm’ will be replaced with new IDs such as ‘@ptsbi’, ‘@pthdfc’, ‘@ptaxis’, and ‘@ptyes’.

Paytm emphasizes its commitment to expanding the UPI ecosystem across India in collaboration with NPCI, highlighting its dedication to financial inclusion and digital payments adoption.

Leveraging the robust infrastructure of its banking partners, Paytm assures users and merchants of uninterrupted and secure UPI payments through its application.

Regulatory action against PPBL by the RBI on January 31 mandated the cessation of deposit acceptance in customer accounts, wallets, FASTags, and other instruments by February 29, later extended to March 15.

This directive was issued due to persistent non-compliance and material supervisory concerns regarding PPBL’s operations. Since March 15, Paytm has transitioned to operating as a third-party application provider (TPAP), aligning with its revised role in the financial ecosystem.

In this capacity, Paytm has enlisted Axis Bank, Yes Bank, SBI, and HDFC Bank as its partner PSP banks, ensuring continued service provision to its customers.

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