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 is a crucial step for Paytm, as it will now be able to resume the onboarding of new merchants, a process that had been put on hold since November 2022 due to regulatory restrictions.
The RBI had introduced new guidelines for payment aggregators in March 2020, which mandated that all payment aggregators must obtain a license from the central bank to operate. The guidelines aimed to enhance the security and stability of the payment ecosystem in India. As a result, Paytm, like other payment aggregators, had to apply for a license to continue its operations.
The transfer of the offline merchant business to PPSL is a strategic move by Paytm to comply with the RBI’s regulations. By doing so, Paytm can now operate its offline merchant business under the umbrella of PPSL, which has obtained the necessary license from the RBI. This move will enable Paytm to expand its offline merchant network, which is a critical component of its overall business strategy.
The offline merchant business is a significant contributor to Paytm’s revenue, and the company has been actively working to expand its reach in this segment. With the RBI’s approval, Paytm can now resume the onboarding of new merchants, which will help the company to increase its market share in the offline payment space.
The development is also expected to have a positive impact on Paytm’s overall business, as the company can now focus on expanding its services to a wider range of merchants. Paytm has been investing heavily in its offline merchant business, and the RBI’s approval is a significant milestone in this journey.
The RBI’s license to PPSL is a testament to Paytm’s commitment to complying with regulatory requirements. The company has been working closely with the RBI to ensure that its operations are aligned with the central bank’s guidelines. The approval is also a reflection of the RBI’s efforts to promote a secure and stable payment ecosystem in India.
The move is also expected to have a positive impact on the overall digital payment ecosystem in India. With Paytm resuming its offline merchant onboarding, the company will be able to offer its services to a wider range of merchants, which will help to increase the adoption of digital payments in the country.
In recent years, India has witnessed a significant growth in digital payments, driven by the government’s initiatives to promote a cashless economy. The RBI has been playing a crucial role in promoting digital payments, and the approval of PPSL’s license is a significant step in this direction.
The development is also expected to have a positive impact on Paytm’s competitors, as it will help to create a level playing field in the digital payment space. With Paytm resuming its offline merchant onboarding, other payment aggregators will also be incentivized to apply for a license from the RBI, which will help to promote a secure and stable payment ecosystem in India.
In conclusion, the transfer of Paytm’s offline merchant business to PPSL is a significant development that will help the company to expand its services to a wider range of merchants. The RBI’s approval of PPSL’s license is a testament to Paytm’s commitment to complying with regulatory requirements, and it will have a positive impact on the overall digital payment ecosystem in India.
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