Four banks to partner Paytm for UPI payments; NPCI approval expected this week: Report

The National Payments Corporation of India or NPCI, the body which runs digital payments platform UPI, is likely to approve a third-party application provider or TPAP licence for Paytm, formally known as One 97 Communications, by March 15. This licence will enable Paytm to provide UPI payment service in partnership with other banks.

Paytm, third-party payment app

According to an Economic Times report, the NPCI, which runs the Unified Payments Interface or UPI, is working to certify Paytm’s application to become a third-party payment app.

Paytm to partner with four banks

It further added that four major banks - Yes Bank, Axis Bank, HDFC Bank, and State Bank of India - are likely to collaborate with Paytm for its consumer-facing UPI payments. This will allow Paytm to operate as a payments service provider, even as Paytm Payments Bank stops to operate on March 15.

RBI's crackdown on Paytm

In February 2024, the Reserve Bank of India (RBI) had asked Paytm Payments Bank to cease operations by February 29, 2024. However, the deadline was later extended to March 15. The shutting down of Paytm Payments Bank means that it cannot take new deposits, nor top up Paytm wallets. However, customers can use their existing balance for top-up, till they exhaust it.

"Shift account to other banks"

The Reserve Bank of India (RBI) had also advised customers as well as merchants of Paytm Payments Bank Ltd (PPBL) to shift their accounts to other banks by March 15.

NHAI adviosry on Paytm FASTag

Yesterday, NHAI also advised Paytm FASTag users to shift to other banks. NHAI also said that cutomers should reach out to their respective banks or refer to the FAQs provided on the IHMCL (Indian Highway Management Company Limited) website.