One97 Communications Limited’s Paytm might be signing with HDFC Bank, a private sector lender, as its third merchant. This will help merchants migrate to the Paytm platform, according to a report by MoneyControl.
These merchants were added to the Paytm app as UPI merchants by Paytm Payments Bank Limited (PPBL). However, Paytm Payments Bank is currently undergoing a crisis, and recently, the central bank instructed PPBL to halt all banking services starting on March 15. On January 31, the RBI put some restrictions on the fintech platform for “persistent non-compliances and continued material supervisory concerns."
Both Axis and Yes Bank have already gone live on the Paytm platform. Further, the fintech platform is also in talks with Canara and Kotak Mahindra Bank. Canara Bank is likely to go live next week, according to Moneycontrol.
One97 Communications’s Paytm has already collaborated with the State Bank of India (SBI) for Unified Payments Interface (UPI) payments. Both SBI and HDFC are likely to go live as payment service providers for the fintech platform, and they will act as third-party application providers.
In simple words, a third-party app provider offers UPI-enabled services to customers. This allows them to conduct transactions through the Unified Payments Interface. Initially, Paytm Payments Bank was the provider of UPI services.
Both Axis Bank and Yes Bank went live on the Paytm platform on March 15. This was the day of the RBI’s deadline. As per the release shared by Paytm, “Four banks (Axis Bank, HDFC Bank, State Bank of India, and Yes Bank) shall act as PSP (Payment System Provider) banks to OCL.”
It further adds, “YES Bank shall also be acting as merchant acquiring bank for existing and new UPI merchants for OCL. @Paytm” handle shall be redirected to Yes Bank.”
Migrating to Yes Bank will allow Paytm users to continue their UPI transactions with seamless communication.
The National Payments Corporation of India (NPCI) wants merchant banks to be migrated to multiple accounts, which will avoid the risk of concentration. However, the requirement for banks to conduct KYC for many merchants contributes to delays in the discussions, according to Moneycontrol.
