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 license approval 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 decision aimed at ensuring compliance with the RBI’s guidelines for payment aggregators. 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 regulations and guidelines for the industry.
The RBI had introduced the Payment Aggregator (PA) license framework in 2020, with the aim of regulating and overseeing the payment aggregation industry. The framework requires payment aggregators to obtain a license from the RBI, and to comply with certain guidelines and regulations. The guidelines include requirements for capital adequacy, risk management, and consumer protection, among others.
Paytm’s decision to transfer its offline merchant business to PPSL is a testament to the company’s commitment to compliance and regulatory adherence. By obtaining the PA license, PPSL has demonstrated its ability to meet the RBI’s stringent requirements and guidelines for payment aggregators.
The resumption of new merchant onboarding by PPSL is expected to have a positive impact on Paytm’s offline merchant business. The company had been facing challenges in onboarding new merchants due to the RBI freeze, which had been in place since November 2022. With the PA license in place, PPSL can now resume the onboarding process, which is expected to drive growth and expansion of Paytm’s offline merchant business.
The development is also expected to have a positive impact on the overall digital payments industry in India. The RBI’s PA license framework is designed to promote transparency, accountability, and consumer protection in the payment aggregation industry. By obtaining the PA license, PPSL has set a precedent for other payment aggregators to follow, and is expected to contribute to the growth and development of the industry as a whole.
In recent years, Paytm has been expanding its offline merchant business, with a focus on enabling small and medium-sized businesses to accept digital payments. The company has been investing heavily in its offline merchant business, with a focus on developing new products and services that cater to the needs of small and medium-sized businesses.
The transfer of the offline merchant business to PPSL is expected to further accelerate the growth of Paytm’s offline merchant business. With the PA license in place, PPSL can now focus on expanding its merchant network, and developing new products and services that cater to the needs of small and medium-sized businesses.
In conclusion, the transfer of Paytm’s offline merchant business to PPSL is a significant development that demonstrates the company’s commitment to compliance and regulatory adherence. The PA license approval is expected to have a positive impact on Paytm’s offline merchant business, and is expected to contribute to the growth and development of the digital payments industry in India.
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