Vijay Ka Jaadu? Merchants Support Paytm Despite RBI Restrictions

In the midst of regulatory hurdles faced by Paytm Payments Bank (PPBL), merchants have emerged as a strong support system for the embattled digital payment platform. Despite the challenging times marked by regulatory interventions, merchants have remained steadfast in their allegiance to Paytm, affirming their continued trust and reliance on the platform for facilitating transactions. 

Survey Finds Merchants Trust Paytm Despite RBI Restrictions

A recent survey conducted by Gurugram-based business consulting and services firm Datum Intelligence revealed that the stringent regulatory actions taken by the Reserve Bank of India (RBI) against Paytm Payments Bank (PPBL) have not significantly eroded merchants' confidence in the popular payment platform. Despite the regulatory clampdown, the survey indicates that a considerable majority of merchants remain steadfast in their usage of Paytm for transactions.

According to the survey, which polled 2,000 merchants utilizing Paytm applications across 12 major cities, an encouraging 59% of respondents affirmed their continued reliance on Paytm, reporting no immediate adverse effects from the government's regulatory intervention. Conducted between February 7 and 15, the survey sheds light on the resilience of Paytm's merchant base in the face of regulatory turbulence.

Furthermore, the survey revealed that while 21% of merchants expressed a cautious stance, opting to wait for additional information before making any decisions, a mere 13% indicated a shift towards alternative payment platforms. This steadfastness underscores the enduring trust merchants place in Paytm despite the regulatory uncertainties.

Paytm's Proactive Engagement Bolsters Merchant Confidence

Crucially, the survey highlights Paytm's proactive outreach efforts in the wake of the RBI's directives as a significant factor in sustaining merchant confidence. An impressive 71% of surveyed merchants reported feeling reassured to continue utilizing Paytm for transactions following direct communication from Paytm representatives. Conversely, only 11% expressed diminished confidence, while approximately 14% remained in search of further clarification.

The survey underscores Paytm's concerted efforts to assuage merchant concerns and mitigate potential business disruptions. By engaging directly with merchants and providing clarifications, Paytm aims to minimize the impact of regulatory actions on its user base.

Regulatory Context and Paytm's Response

The RBI's regulatory measures, announced on January 31, mandated PPBL—a subsidiary of One 97 Communications—to cease accepting new deposits into its accounts and digital wallets. Despite these restrictions, the RBI granted a 15-day extension, until March 15, 2024, for most activities associated with Paytm Payments Bank, offering a temporary reprieve.

Moreover, the RBI clarified that customers utilizing @paytm UPI handles could be seamlessly migrated to other banks following approval from the National Payments Corporation of India (NPCI), ensuring continued service for affected users.

While the regulatory actions by the RBI have introduced challenges for Paytm Payments Bank, the survey underscores merchants' enduring trust in the platform and Paytm's proactive efforts to address concerns, thereby mitigating the immediate impact on business operations.

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