Paytm Payment Services Gets a Second Chance: RBI Allows Extension for License Application Resubmission

Paytm Payment Services Gets a Second Chance: RBI Allows Extension for License Application Resubmission

Table of Content

In this article, we’ll delve into the recent developments surrounding Paytm Payment Services’ opportunity to resubmit their Payment Aggregator license application to the Reserve Bank of India (RBI) and the implications this has on their business operations.

Key Takeaways:

  • RBI grants Paytm Payment Services an extension to resubmit its Payment Aggregator license application.
  • Paytm Payment Services can continue operations while awaiting government approval on past investments.
  • One97 Communications, the parent company, can still onboard new merchants and offer payment services for offline businesses.

RBI’s Extension to Paytm Payment Services

Paytm Payment Services Ltd (PPSL) has been given more time by the Reserve Bank of India (RBI) to submit a new application for a Payment Aggregator (PA) license. 

This news was shared by PPSL’s parent company, One97 Communications, through an official regulatory filing on March 26, 2023.

Ongoing Operations During the Application Process

The central bank has also permitted PPSL to continue operating as a payment aggregator while awaiting government approval for past investments received from One97 Communications. 

However, PPSL cannot onboard any new merchants for its online payment aggregation business during this time.

One97 Communications’ Role in Offline Business

For offline business operations, One97 Communications can continue to onboard new merchants and provide them with payment services, including all-in-one QR, soundbox, card machines, and more.

Payment Aggregators Explained

Online payment aggregators are entities that onboard digital merchants and facilitate customer payments on their behalf after obtaining a license from the payment regulator. 

The RBI issued guidelines on the regulation of payment aggregators and payment gateways on March 17, 2020, and March 31, 2021.

Previous Rejection of Paytm’s PA License Application

On February 16, 2023, it was reported that the PA license application of Paytm Payment Services Limited, along with three other applications, had been returned by the central bank. 

The applications of Freecharge Payment Technologies Private Limited, PayU Payments Private Limited, and Tapits Technologies Private Limited were also returned.

Continuation of Online Payment Aggregation Business

Paytm Payment Services will be able to maintain its online payment aggregation operations with its current partners without having to add any new merchants during the application process. 

The company has confirmed that these recent changes will not have any significant effects on PPSL’s business or earnings.

Conclusion

The Reserve Bank of India’s decision to grant Paytm Payment Services an extension to resubmit its Payment Aggregator license application offers the company a second chance at securing the necessary authorization. 

While Paytm awaits government approval on past investments, it can continue to operate its existing online payment aggregation business and onboard new merchants for offline payment services through its parent company,One97 Communications. 

This extension provides Paytm Payment Services with an opportunity to address any concerns raised by the RBI and potentially secure the required license to expand its online payment aggregation services. 

The outcome of this process will undoubtedly have a significant impact on the company’s future growth and operations in the Indian fintech landscape.

 

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Written by

Alexander Sterling

Alexander Sterling

Alexander Sterling is a renowned financial writer with over 10 years in the finance sector. With a strong economics background, he simplifies complex financial topics for a wide audience. Alexander contributes to top financial platforms and is working on his first book to promote financial independence.

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Judith

Judith

Judith Harvey is a seasoned finance editor with over two decades of experience in the financial journalism industry. Her analytical skills and keen insight into market trends quickly made her a sought-after expert in financial reporting.