Paytm shifts offline merchant business to subsidiary post-RBI’s PA license
In a significant development, Paytm parent One 97 Communications has completed the transfer of its offline merchants’ payment business to its wholly-owned subsidiary, Paytm Payments Services Limited (PPSL). This move comes after PPSL received the Reserve Bank of India’s (RBI) license to operate as a Payment Aggregator (PA). The approval from the RBI paves the way for PPSL to resume the onboarding of new merchants, a process that had been under an RBI freeze since November 2022.
The transfer of the offline merchant business to PPSL is a strategic move by Paytm to comply with the RBI’s regulations and to strengthen its payment aggregator business. As a Payment Aggregator, PPSL will be responsible for facilitating transactions between merchants and customers, and will be required to adhere to the RBI’s guidelines and regulations.
The RBI had introduced the Payment Aggregator (PA) license in 2020, with the aim of regulating the payment aggregator space and ensuring that payment aggregators operate in a secure and transparent manner. The license requires payment aggregators to meet certain criteria, including having a minimum net worth of Rs 15 crore, and to adhere to strict guidelines and regulations.
Paytm’s decision to transfer its offline merchant business to PPSL is a significant development in the payment aggregator space. The company had been operating its offline merchant business through its parent entity, One 97 Communications, but the RBI’s license to PPSL has enabled the company to separate its payment aggregator business and operate it through a dedicated subsidiary.
The transfer of the offline merchant business to PPSL is expected to have a positive impact on Paytm’s business. The company will be able to resume the onboarding of new merchants, which had been frozen since November 2022. This will enable Paytm to expand its merchant base and increase its transaction volumes.
Moreover, the approval from the RBI is a significant milestone for Paytm, as it demonstrates the company’s commitment to complying with the regulator’s guidelines and regulations. The license to PPSL is a testament to Paytm’s ability to operate its payment aggregator business in a secure and transparent manner.
The development is also expected to have a positive impact on the overall payment ecosystem in India. The RBI’s regulation of the payment aggregator space is expected to lead to increased transparency and security in the payment ecosystem, and Paytm’s compliance with the regulator’s guidelines is expected to set a precedent for other payment aggregators in the country.
In addition, the transfer of the offline merchant business to PPSL is expected to enable Paytm to focus on its core business of providing payment services to merchants and customers. The company will be able to leverage its technology and expertise to provide innovative payment solutions to its customers, and to expand its merchant base.
Overall, the transfer of Paytm’s offline merchant business to PPSL is a significant development in the payment aggregator space. The approval from the RBI demonstrates Paytm’s commitment to complying with the regulator’s guidelines and regulations, and is expected to have a positive impact on the company’s business and the overall payment ecosystem in India.
The development is also expected to have a positive impact on the Indian economy, as it is expected to lead to increased digital payments and financial inclusion. The RBI’s regulation of the payment aggregator space is expected to lead to increased transparency and security in the payment ecosystem, and Paytm’s compliance with the regulator’s guidelines is expected to set a precedent for other payment aggregators in the country.
In conclusion, the transfer of Paytm’s offline merchant business to PPSL is a significant development in the payment aggregator space. The approval from the RBI demonstrates Paytm’s commitment to complying with the regulator’s guidelines and regulations, and is expected to have a positive impact on the company’s business and the overall payment ecosystem in India.
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