NPCI Grants Approval to Paytm as UPI Third-Party Application Provider


The digital payments landscape in India has witnessed rapid growth, with the Unified Payments Interface (UPI) playing a pivotal role. Amidst this, Paytm, a prominent player, has been granted a significant approval by the National Payments Corporation of India (NPCI).

NPCI has formally approved Paytm, also known as One 97 Communications (OCL), to participate in UPI as a Third-Party Application Provider (TPAP) under the multi-bank model. This development comes just a day before the Reserve Bank of India’s deadline of March 15 for Paytm Payments Bank.

Four major banks have received approval to collaborate with Paytm:

1. Axis Bank
2. HDFC Bank
3. State Bank of India (SBI)
4. YES Bank

These banks will act as Payment System Provider (PSP) banks to OCL. Moreover, YES Bank will serve as the merchant acquiring bank for existing and new UPI merchants associated with Paytm. The “@Paytm” handle will be redirected to YES Bank, ensuring seamless UPI transactions and AutoPay mandates.

The third-party application provider license allows Paytm customers to continue using the Paytm app for payments via UPI, even after the closure of Paytm Payments Bank. UPI, operated by NPCI, facilitates money transfers across banks. Paytm, the third-largest UPI app in India, processed a staggering 1.41 billion monthly transactions worth ₹1.65 trillion ($19.94 billion) in February. This approval ensures uninterrupted UPI services for Paytm users.

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