Paytm has partnered with Axis Bank to process and settle merchant payments of Paytm QR codes and soundboxes. The company was sanctioned by the Reserve Bank of India for failing to comply with regulatory guidelines, resulting in the termination of its nodal account.
Paytm confirms that it has shifted its nodal account to Axis Bank via an escrow account, to prevent service disruptions for merchants across India.
The new partnership with Axis Bank means that Paytm merchants can now seamlessly accept payments, and use soundboxes and POS machines even after the deadline of March 15, 2024.
Paytm’s merchant QR codes, soundboxes, and POS machines use a weekly settlement cycle with business owners. This system uses a nodal account where funds are collected by Paytm from customers, and held in a separate account temporarily.
Without a nodal account, Paytm could not settle merchant payments and hence was actively searching for a partner bank.
Paytm Payments Bank, Wallet, and FASTags Remain Sanctioned
Paytm’s partnership with Axis Bank does not affect the Paytm Payments Bank, Paytm Wallet, Paytm FASTags, and Paytm NCMC cards.
These listed services continue to remain sanctioned by RBI, and Paytm can no longer accept new deposits in these instruments after March 15.
The original deadline for the same was previously February 29, which was recently extended by RBI so that customers will have enough time to switch to alternative service providers.
Paytm’s Issues Are Not Sorted Completely
While Paytm has managed to rescue its merchant QR business in India, the company still has a long uphill battle. Payments bank, FASTags, and wallets are a key part of Paytm’s core business, and Vijay Shekhar Sharma is unlikely to give up these services.
According to his recent posts on X (formerly Twitter), Paytm has set up a Group Advisory Committee with former senior members of SEBI, Andhra Bank, and ICAI to find solutions and comply with RBI guidelines.
