RBI looks to ensure @paytm migration

 Asks NPCI to consider fintech firm’s request to be third-party provider

AJAY RAMANATHAN

Mumbai, February 2

THE RESERVE BANK of India (RBI) has asked the National Payments Corporation of India (NPCI) to examine Paytm parent One97 Communications’ request to be a third-party application provider (TPAP). If approved, this would allow Paytm to continue processing payments via the Unified Payment Interface (UPI). However, it will need a set of newly identified banks to back the app. “Inthe event of NPCI granting TPAP status to One97 Communications, it may be stipulated that ‘@paytm’ handles must be migrated in a seamless manner from Paytm Payments Bank to a set of newly identified banks to avoid any disruption,”’ the central bank said in the notification. It furtherstated that nonewuserswillbe added by the third-party application until all existing users are migrated satisfactorily toanewhandle. “The RBI’ smoveis on expected lines.With the TPAP licence, Paytm will become exactly the same as Google Pay or PhonePe. Like any other TPAP theyrequire a licence from NPCI. Theywill have toworkwith multiple sponsor banks,’said Ranadurjay Talukdar, partnerand payments sector leader, EY India. The central bank has asked NPCI to facilitate the certification of four to five banks who must demonstrate capabilities to process high volume transactions, in line with NPCI norms to minimise concentra-

tion risks. According to reports, Axis Bank,

HDFC Bank and Yes Bank have applied for

TPAP application for Paytm’s UPI business.

“For the merchants using Paytm QR

codes, OCL (One97 Communications) may

open the settlement accounts with one or

more PSP banks (other than Paytm Pay-

ments Bank),” the notification said.

Further, RBI has clarified that the migra-

tion of UPThandles isapplicable onlyto such

customers and merchants who have a

‘@paytm’ UPT handle.Noaction isrequired

for customers who have a UPI address or

handles other than‘@paytm’.

                              Continued on Page 12

RBI looks to ensure @paytm migration

Customers of Paytm Payments Bank must make alternative arrangements with other banks before the March 15 deadline. RBI has asked holders of FAST ag and National Common Mobility Cards issued by Paytm Payments Bank to make alternative arrangements before March 15. Hence, these users must migrate to other banks. “All the above actions are under taken in the so leinte rest of protecting the customers and payment system from any possible disruptions and are without any prejudice to the regulatory or supervisory actions in it iated by RBI against Paytm Payments Bank,” the notification said. On January 31, RBI asked @paytm migration Paytm’s payme ntsbankunit to shut many of it so perationsciting persistent non-compliances and continued material supervisory concerns. While RBI has not disclosed the specific reasons for its measures, media reports say the payments bank came under the scanner for KYC irregularities. “I do not think having a payments bank was a significant enough differentiator. If One97 Communications is able to quickly become a TPAP and all arrangement sare putin place, I see limited disruption for con sumersin the longrun,” added Talukdar. Currently, Paytm’s UPI market share stands at 13%. PhonePe and Google Pay are the two largest players in the segment.