Paytm shifts offline merchant business to subsidiary post-RBI’s PA license
In a significant development, Paytm parent One 97 Communications has announced the completion of the transfer of its offline merchants’ payment business to its wholly-owned subsidiary, Paytm Payments Services Limited (PPSL). This move comes on the heels of PPSL receiving the Reserve Bank of India’s (RBI) license to operate as a Payment Aggregator (PA). The development is a major milestone for Paytm, as it paves the way for the company to resume the onboarding of new merchants, a process that had been under an RBI freeze since November 2022.
The RBI had introduced the Payment Aggregator (PA) license in 2020, with the aim of regulating and overseeing the payment aggregation industry in India. The license is mandatory for all payment aggregators, including those operating in the online and offline spaces. Paytm, being one of the largest payment aggregators in the country, had to comply with the RBI’s regulations and obtain the necessary license to continue its operations.
The transfer of the offline merchant business to PPSL is a strategic move by Paytm, as it allows the company to separate its payment aggregation business from its other operations. This separation is in line with the RBI’s guidelines, which require payment aggregators to operate as separate entities from their parent companies. By transferring the offline merchant business to PPSL, Paytm is able to demonstrate its commitment to compliance with the RBI’s regulations and ensure the continuity of its payment aggregation business.
The receipt of the PA license by PPSL is a significant achievement for Paytm, as it validates the company’s adherence to the RBI’s guidelines and regulations. The license is a testament to Paytm’s ability to operate as a responsible and compliant payment aggregator, and it paves the way for the company to expand its payment aggregation business in the future.
With the PA license in place, PPSL will be able to resume the onboarding of new merchants, which had been put on hold since November 2022. This development is expected to have a positive impact on Paytm’s business, as it will enable the company to expand its merchant network and increase its payment volumes. The resumption of new merchant onboarding will also provide a boost to Paytm’s revenue growth, as the company will be able to generate additional income from transaction fees and other payment-related services.
The development is also expected to have a positive impact on the Indian economy, as it will enable more merchants to accept digital payments and expand their customer base. The growth of digital payments in India has been rapid in recent years, and the RBI’s PA license is expected to further accelerate this growth. By providing a regulated and secure environment for payment aggregators to operate, the RBI is promoting the adoption of digital payments and driving financial inclusion in the country.
In conclusion, the transfer of Paytm’s offline merchant business to PPSL and the receipt of the PA license are significant developments for the company. The move demonstrates Paytm’s commitment to compliance with the RBI’s regulations and paves the way for the company to expand its payment aggregation business in the future. With the PA license in place, PPSL will be able to resume the onboarding of new merchants, which is expected to have a positive impact on Paytm’s business and the Indian economy as a whole.
The development is a testament to the RBI’s efforts to regulate and oversee the payment aggregation industry in India. The PA license is an important step towards promoting the adoption of digital payments and driving financial inclusion in the country. By providing a regulated and secure environment for payment aggregators to operate, the RBI is promoting the growth of digital payments and driving economic development in India.
As the digital payments industry in India continues to grow and evolve, it is expected that the RBI will continue to play a crucial role in regulating and overseeing the industry. The PA license is an important milestone in this journey, and it is expected to have a significant impact on the growth and development of the digital payments industry in India.
In the coming months and years, it is expected that Paytm and other payment aggregators will continue to expand their operations and drive the growth of digital payments in India. The RBI’s PA license is an important step towards promoting the adoption of digital payments and driving financial inclusion in the country. As the industry continues to evolve, it is expected that the RBI will continue to play a crucial role in regulating and overseeing the payment aggregation industry in India.
About the Author
