Paytm Receives Approval from NPCI to Continue Offering UPI Services as a Third-Party Application Provider

The National Payments Corporation of India (NPCI) has approved One97 Communications Limited (OCL), the parent company of Paytm, to provide UPI services as a Third-Party Application Provider (TPAP) under the multi-bank model.
This license will allow Paytm to continue offering Unified Payments Interface (UPI) services to its app users, even after its banking unit Paytm Payment bank Limited (PPBL) ceases operations on March 15. Paytm will now partner with four new banks (Axis Bank, HDFC Bank, State Bank of India, and Yes Bank) to provide the payment service, with these banks acting as Payment System Providers (PSP).
Under the new model, Paytm’s UPI app will connect with the banking channel through these PSP banks, which will act as the merchant acquiring bank for existing and new UPI merchants. Yes Bank will also handle the redirection of the @Paytm handle.
The NPCI has advised Paytm to complete the migration of all existing handles and mandates to the new PSP banks as soon as possible. Paytm is the third-largest app for UPI payments in India, with the majority of transactions and gross merchandise value (GMV) coming from its customers using the UPI for transactions on its app.