Paytm Payments Bank’s wallet business has been suffering a rapid decline ever since regulatory restrictions from the Reserve Bank of India, as per a report by the Economic Times.
On January 31 of this year, the RBI issued a notification where it put restrictions on Paytm Payments Bank for “persistent non-compliance issues." As per the restrictions imposed, no further top-ups, credit transactions, or deposits will be allowed in the customer’s account. Similarly, the bank cannot add new customers.
Amid the ongoing restrictions, the last three months saw a steady decline in the number of customers using the Paytm Payments Bank wallet. In March, Paytm Payments Bank recorded 7.4 million fund transfer transactions in its prepaid payment instrument business, as per data from the RBI as reported by the Economic Times.
This was a 64 percent decrease from 20.7 million in December 2023. Further, transactions for goods and services using the wallet were at 66 million, which is just over a quarter of the 247 million transactions that were seen during the same period, as per the report.
Similarly, in terms of the value of transactions, Paytm Payments Bank wallets saw a fall in transactions from Rs 13,997 crore in December 2023 to Rs 4,163 crore in March this year.
With the RBI imposing restrictions, Paytm got a third-party app license from the National Payment Corporation of India (NPCI). Now, the company has integrated with four banks, including the State Bank of India, Yes Bank, HDFC, and Axis Bank, for UPI payment services.
Similarly, the March data released by the NPCI shows that Paytm reported a drop in UPI transactions from 1.3 billion in February to 1.2 billion transactions in March. However, competitors such as PhonePe and GooglePe saw an increase in UPI transactions. GooglePe’s transactions increased from 4.7 billion in February to 5 billion in March. PhonePe’s transactions increased from 6 billion in February to 6.5 billion in March.
