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India\u2019s Paytm has secured a vital license it needed to survive and maintain continuity of several core features of its eponymous payments app, a day before the firm\u2019s banking unit is scheduled to cease operations because of regulatory clampdown.<\/p>\n
The National Payments Corporation of India, the firm that built the eponymous UPI rail in the country, approved Paytm\u2019s application to participate in the payments ecosystem as a third-party application provider. The license won\u2019t restore several of the perks Paytm enjoyed before, but will allow the Noida-headquartered firm to operate similarly as Walmart\u2019s PhonePe and Alphabet\u2019s Google Pay.<\/p>\n
The third-party application provider license will enable Paytm to offer payments through the UPI network even as Paytm\u2019s parent firm One97 Communications\u2019 banking unit \u2014 Paytm Payments Bank \u2014 is scheduled to cease operations<\/a> on Friday.<\/p>\n The Reserve Bank of India ordered Paytm in late January to cease operations at Paytm Payments Bank, an affiliate of the financial services firm that processed a majority of its transactions.<\/p>\n The move created shockwaves through the industry, and also meant that Paytm needed to secure the third-party application provider license to continue many of the Paytm app\u2019s operations. The RBI\u2019s order also wiped billions off Paytm\u2019s market cap, cutting the firm\u2019s valuation by more than a half.<\/p>\n Axis, HDFC, State Bank of India and Yes Bank will serve as payment system provider to the Paytm app, NPCI said Thursday. The company has also been advised by NPCI to complete migration for all existing handles and mandates to new PSP banks at the earliest.<\/p>\n \u201cYES Bank shall also be acting as merchant acquiring bank for existing and new UPI merchants for OCL. \u2018@Paytm\u2019 handle shall be redirected to YES Bank,\u201d NPCI said in a statement.<\/p>\n The RBI set up NPCI, which collaborated with the country\u2019s lenders to build UPI in an attempt to make retail payments faster, more accessible and cost-efficient. Individuals in India can transact with everybody else in the country by just using their virtual payment address.<\/p>\n The RBI had advised NPCI to swiftly issue the third-party application provider license, or TPAP, to Paytm to help mitigate disruptions for its customers.<\/p>\n<\/p><\/div>\n