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 development is expected to have a significant impact on Paytm’s offline merchant business, which had been under a regulatory freeze since November 2022.
The RBI had introduced the Payment Aggregator (PA) license framework in 2020, with the aim of regulating and supervising online payment aggregators. The framework requires payment aggregators to obtain a license from the RBI to operate in the country. Paytm Payments Services Limited (PPSL), a wholly-owned subsidiary of One 97 Communications, had applied for the PA license and has now received the approval.
As a result of this approval, PPSL will resume the onboarding of new merchants, a process that had been put on hold since November 2022. The RBI had frozen the onboarding of new merchants by Paytm and other payment aggregators, citing concerns over the regulatory framework and the need for greater oversight. With the PA license in place, PPSL will now be able to resume the onboarding of new merchants, which is expected to boost Paytm’s offline merchant business.
The transfer of the offline merchant business to PPSL is a significant development for Paytm, as it will allow the company to operate its payment aggregator business in a more regulated and supervised environment. The PA license framework introduced by the RBI is aimed at ensuring that payment aggregators operate in a safe and secure manner, with adequate safeguards in place to protect consumer interests.
The approval of the PA license is also expected to have a positive impact on Paytm’s overall business, as it will enable the company to expand its payment aggregator business and increase its market share. Paytm has been one of the leading players in the Indian digital payments market, and the PA license is expected to further strengthen its position in the market.
The development is also significant from a regulatory perspective, as it highlights the RBI’s efforts to regulate and supervise the digital payments market in India. The RBI has been taking steps to ensure that the digital payments market operates in a safe and secure manner, with adequate safeguards in place to protect consumer interests. The PA license framework is an important part of this effort, as it provides a regulatory framework for payment aggregators to operate in.
In terms of the implications for Paytm’s business, the transfer of the offline merchant business to PPSL is expected to have a positive impact on the company’s revenue and profitability. The PA license will enable PPSL to operate in a more regulated and supervised environment, which is expected to increase consumer confidence and trust in the Paytm brand. This, in turn, is expected to drive growth in Paytm’s payment aggregator business, which is a key contributor to the company’s revenue and profitability.
Overall, the transfer of Paytm’s offline merchant business to PPSL is a significant development that highlights the company’s commitment to operating in a regulated and supervised environment. The PA license framework introduced by the RBI is an important part of this effort, as it provides a regulatory framework for payment aggregators to operate in. With the PA license in place, PPSL is expected to resume the onboarding of new merchants, which is expected to drive growth in Paytm’s payment aggregator business.
In conclusion, the transfer of Paytm’s offline merchant business to PPSL is a significant development that highlights the company’s commitment to operating in a regulated and supervised environment. The PA license framework introduced by the RBI is an important part of this effort, as it provides a regulatory framework for payment aggregators to operate in. With the PA license in place, PPSL is expected to resume the onboarding of new merchants, which is expected to drive growth in Paytm’s payment aggregator business.
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