पेटीएम ऐप | Image:Shutterstock
Partners in crisis: Private banks HDFC and Yes Bank have applied to the National Payments Corporation of India (NPCI) for third-party application status for UPI this week, as per reports.
This comes after The Reserve Bank of India ordered the NPCI to look into Paytm parent One97 Communication’s request as a TPAP for the Unified Payments Interface (UPI).
RBI said NPCI may facilitate the certification of 4-5 banks as Payment Service Provider (PSP) Banks, who exhibit demonstrated capabilities to process high volume UPI transactions.
As per reports, Paytm has also initiated conversations with SBI, Canara Bank and ICICI Bank for TPAP partnerships.
Amid RBI’s mandate on allowing only withdrawals and no deposits in banks and wallets, and an order to migrate linked FASTags and National Common Mobility Cards (NCMC), Paytm is fast-tracking its partnerships with third party players.
It is also likely that the transition from PPBL to other banks will take six months, as per media reports. It is also expected for @paytm to remain functional after March 15.
Meanwhile, Paytm cannot onboard new customers until all have been migrated to Paytm’s new UPI handle, the RBI said.
Paytm and Banks
The development comes after Paytm Payments Bank Limited (PPBL) was restricted by the RBI to accept further credits in customer accounts and wallets by February 29, which the RBI extended by 15 days in mid-February.
Paytm has asked users to migrate default accounts from PPBL to another banking platform. Paytm has partnerships with leading public and private banks such as the State Bank of India (SBI), Punjab National Bank (PNB), ICICI Bank, Kotak Bank, as well as hundreds of others listed on its platform.
In 2018, Paytm had partnered with IndusInd Bank to offer fixed deposits. Before Paytm having its own bank for PSP partnerships, it had third party bank partnerships like other UPI providers and wallets in the league of PhonePe, Google Pay and Amazon.
Restrictions on the listed fintech are bound to affect merchants, who have been using Paytm’s banking services to receive payments. This also led the Confederation of All India Traders (CAIT) to ask users to migrate to other players such as PhonePe and Google Pay. The February 29 deadline to wind down operations then was extended by 15 days till March 15, the RBI said in a February order in the interest of merchants.
In January this year, Paytm said it crossed 100 million monthly transacting users for the first time, during its third-quarter results.
The company saw its revenue rise 38 per cent annually to Rs 2,850.5 crore in the October to December period.
