One97 Communications’s Paytm might soon get approval for a third-party application provider (TPAP) by this week. The National Payments Corporation of India (NPCI) is likely to give approval for the same by March 15, as per a report by Reuters.
A third-party application furnishes UPI-compliant applications to end users' customers, enabling Unified Payments Interface (UPI)-based payment transactions. Through this, customers can continue making their payments via UPI or the Paytm app. This comes even after Paytm Payments Bank’s operation will cease on March 15 by the RBI. This is because of "persistent non-compliance and continued material supervisory concerns."
The Reuters report says, “The TPAP license approval will come before March 15, and most of the checks have been completed.” While the license approval will happen soon, the integration with the bank will take more than a month.
Axis Bank, HDFC Bank, State Bank of India, and Yes Bank are some of the new banks with which Paytm is likely to tie up and process transactions via UPI. The report further adds that Paytm has been regularly meeting with the NPCI to obtain the license.
Ever since the Paytm crisis, there has been a decrease in UPI transactions via UPI. It decreased from 1.57 billion transactions in January to 1.41 billion transactions in February. After March 15, Paytm Payments Bank will face restrictions such as not being able to accept fresh deposits, transferring money via Paytm Payments Bank, and more.
Similarly, FASTag functionalities and top-ups won’t be available on the platform. In its recent issue, Outlook Business did a deep dive into the complexities that led to the current situation that Paytm is facing. It was found out that the RBI gave four warnings to the fintech platform.
