PayTM approved by NPCI for User Bank Migration

Paytm has received approval from the National Payments Corporation of India (NPCI) to migrate its users to other banks for Unified Payments Interface (UPI) based payment services.

The company has completed its integration with four major banks – State Bank of India, Yes Bank, HDFC Bank, and Axis Bank – and has started the process of transitioning its users to these new Payment System Provider (PSP) banks.

However, following a directive from the Reserve Bank of India (RBI) ordering Paytm Payments Bank to shut down basic banking services by March 15, 2024, Paytm had to migrate its systems to other banks to ensure continuity of its payments business.

NPCI Approval and Integration

On March 14, 2024, NPCI allowed Paytm to migrate into a Third-Party Application Provider (TPAP) model with the four aforementioned banks.

The backend integration is now complete, and customer migration can commence. Paytm received clearance from NPCI on April 16, 2024, to start the migration of its users. All @paytm handle users will now be migrated to these banks.

What is TPAP for Seamless UPI Payments?

• The four banks are now operational on the TPAP, streamlining the process for Paytm to shift user accounts to them. This ensures that Paytm can continue to provide uninterrupted and secure UPI payments for both users and merchants through the Paytm app.
• TPAP is a model that allows a third-party application provider, such as Paytm, to integrate with multiple banks for UPI payment services. Under this model, the third-party application provider can onboard users and facilitate UPI transactions through the infrastructure of partner banks, without having to rely on a single bank or its own payments bank.
• TPAP which is a multi-bank payment service provider API model introduced by the National Payments Corporation of India (NPCI) for UPI (Unified Payments Interface) transactions.
• TPAP is a significant development in the UPI payments landscape, as it allows third-party application providers like Paytm to integrate with multiple banks, ensuring a more reliable, secure, and seamless payment experience for users while complying with regulatory requirements and fostering the growth of the UPI ecosystem.

New Virtual Payment Addresses (VPAs)

• Paytm UPI users can now create new VPAs with partner PSP banks.
• The company has started transitioning ‘@paytm’ handle users to these banks, ensuring a smooth transition to the new UPI IDs.
• The new VPAs will be in the format of @ptsbi, @pthdfc, @ptaxis, and @ptyes, corresponding to the respective partner banks.

About Paytm

Paytm is an Indian multinational financial technology company, founded in 2010 by Vijay Shekhar Sharma.

• Offers digital payment services, including mobile recharges, utility bill payments, and QR code-based transactions
• Launched Paytm Wallet, a mobile-based payment solution, in 2014
• Became India’s first payment app to cross over 100 million downloads in 2017
• Introduced Paytm Payments Bank in 2017, which later faced regulatory issues
• Listed on Indian stock exchanges in 2021, raising $2.5 billion in India’s largest-ever IPO

Month: Current Affairs - April, 2024

Category: Economy & Banking Current Affairs