NPCI grants approval to Paytm to participate in UPI as a third-Party application provider, these are the partner banks

Ananya Shroff
2 Min Read

In a significant development for Paytm, the National Payments Corp of India (NPCI) has granted approval to Paytm, formerly known as One 97 Communications (OCL), to participate in the Unified Payment Interface (UPI) as a Third-Party Application Provider (TPAP) under the multi-bank model. This announcement comes just a day before the March 15 deadline set by the Reserve Bank of India for Paytm Payments Bank.

Four prominent banks – Axis Bank, HDFC Bank, State Bank of India, and YES Bank – have received approval to act as Payment System Provider (PSP) banks for OCL. However, sources indicate that the integration with these banks may require more than a month.

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YES Bank will also serve as the merchant acquiring bank for both existing and new UPI merchants associated with OCL. Under this arrangement, the “@Paytm” handle will be redirected to YES Bank, ensuring uninterrupted UPI transactions and AutoPay mandates for existing users and merchants. OCL has been urged to expedite the migration of all existing handles and mandates to the new PSP banks as necessary.

The approval as a third-party application provider signifies that Paytm customers can continue using the Paytm app for UPI payments even after the operational cessation of its banking arm, Paytm Payments Bank, on March 15. UPI, overseen by NPCI, facilitates seamless money transfers across various banks.

Despite a slight decrease in transactions compared to January, Paytm remains the third-largest app for UPI payments in India. In February, it processed 1.41 billion monthly transactions valued at 1.65 trillion rupees ($19.94 billion), as per data available on the NPCI website.

This approval ensures continuity and convenience for Paytm users amidst the transition, underscoring the company’s commitment to facilitating secure and efficient digital payments in India.

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