Paytm has been in deep waters since it was penalised by RBI but it seems like its ordeal is nearing its end. The National Payments Corporation of India (NPCI) has granted TPAP status to Paytm, something its parent company, One97 Communications requested last month. But what does it mean for you or merchants? Keep on reading to know more.
Paytm Can Be a TPAP, but What Is It?
NPCI has revealed that Paytm can act as a TPAP (Third-Party Application Provider) for UPI, which means you can continue to make UPI payments via the app.
Four banks, namely, HDFC Bank, Axis Bank, State Bank of India (SBI), and YES Bank will be roped in for Paytm’s Payment System Providers (PSPs). YES Bank will also be the merchant acquiring bank for new and existing UPI users. What does this mean? The previous “@paytm” UPI handle (VPA) will be migrated to YES Bank. Transactions and auto-mandates are said to be seamless.
Why This Matters?
After being penalised by the Reserve Bank of India, Paytm Payments Bank was expected to wind up soon and UPI functionality on Paytm (which was based on the Payments Bank system as Paytm was an independent PSP) could have been impacted too.
Hence, One97 Communications asked for approval to become a TPAP so that at least its UPI services remained unhampered even though it now relies on banks for UPI operations, much like how Google Pay and PhonePe work. This can be good news for both, users and merchants, as the UPI part of the Paytm app will continue to function the way it did earlier.
In addition to this, Paytm’s merchant QR codes will also function as Paytm has collaborated with Axis Bank. This means Paytm QR codes and soundboxes will continue to work across India.
But What About FASTag and Other Paytm Services?
While the Payments Bank won’t work after March 15, other services will continue to operate the way they have been working. This includes the FASTag service, which will be offered under the HDFC Bank. Other banks will partner soon. However, the Payments Bank FASTag won’t work after March 15.
Other functionalities like making recharges, booking movie tickets, the ability to pay credit card bills and even buying/selling gold, and loads more will function as it is.
