NPCI Allows Paytm User Migration to New Payment Service Providers

The National Payments Corporation of India (NPCI) has given a green light to One97 Communications (OCL), the parent company of Paytm, to commence the migration of users to a new payment service provider (PSP) managed by banks.

The move comes as Paytm seeks to ensure uninterrupted UPI services for its vast user base. Four major banks—State Bank of India (SBI), Axis Bank, HDFC Bank, and YES Bank—have been designated as PSPs to facilitate Paytm's operations.

What Does This Mean for Paytm Users?

Paytm users will undergo a seamless transition from Paytm Payment Bank to accounts with the aforementioned partner banks. This migration aims to guarantee smooth UPI payments for both users and merchants, with those possessing '@paytm' handles being prioritised in the process.

The Reason Behind the Change

The approval from NPCI enables Paytm to sustain its UPI services through collaboration with partner banks, ensuring continued functionality for its users.

Impact on Paytm Users

1. Linking Existing Bank Accounts to Paytm: Users will now have the option to link their existing bank accounts to Paytm, enabling them to conduct UPI payments directly from their bank accounts via the Paytm app.
2. Creating New VPAs with Partner Banks: Paytm will introduce the feature for users to generate Virtual Payment Addresses (VPAs) associated with four partner banks: SBI, Axis Bank, HDFC Bank, and YES Bank. For instance, users can opt for VPAs such as yourname@sbi or yourname@axis, depending on their bank preference. Upon migration, the current UPI IDs featuring '@paytm' will be replaced by new IDs corresponding to the partner banks, namely @ptsbi, @pthdfc, @ptaxis, and @ptyes.

Insights from Paytm

According to a statement released by One 97 Communications Limited (OCL), the owner of Paytm, the approval from NPCI on user migration to new PSP bank handles was received recently. The move underscores Paytm's commitment to providing uninterrupted financial services to its users.

Furthermore, on March 14, NPCI granted a third-party application (TPAP) provider permit for Paytm, in collaboration with SBI, Axis Bank, YES Bank, and HDFC Bank, ensuring the continuity of UPI transactions for the company's users.

Background on Paytm's UPI Transactions

Previously, Paytm's UPI transactions were facilitated through Paytm Payments Bank (PPBL). However, the Reserve Bank of India (RBI) imposed restrictions on PPBL, prohibiting it from accepting deposits, credit transactions, or top-ups in customer accounts after March 15.

OCL holds a 49% stake in PPBL, while its Founder and CEO, Vijay Shekhar Sharma, retains a 51% stake in the embattled bank.

The approval for user migration marks a significant step for Paytm as it navigates changes in its operational landscape, ensuring continued reliability and efficiency in its UPI services. Paytm users can expect a prompt transition and ongoing support from the company throughout this process.

Join Our Thriving Entrepreneurial Community

Follow TICE News on Social Media and create a strong community of Talent, Ideas, Capital, and Entrepreneurship. YouTube  | Linkedin | X (Twittrer) | Facebook | News Letters