Paytm gets NPCI nod to onboard new UPI users

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One 97 Communications, which owns brand Paytm, has received approval from the National Payments Corporation of India (NPCI) to onboard new Unified Payment Interface (UPI) users.

This comes nearly nine months after the Reserve Bank of India (RBI) placed an embargo on addition of new customers. 

The latest NPCI approval is however subject to Paytm following all NPCI guidelines and circulars including those on risk management, brand guidelines for app and QR, multi-bank guidelines, TPAP market share and customer data, the NPCI has said.

In a letter to the company’s founder and CEO Vijay Shekhar Sharma, NPCI chief Dilip Asbe granted approval for the Noida-based firm to resume onboarding new users.

“We would like to inform you that vide letter dated October 22, 2024, the National Payments Corporation of India (NPCI) has granted approval to the Company to on-board new UPI users, with adherence to all NPCI procedural guidelines and circulars,” Paytm said in an exchange filing late Tuesday. 

Increase in UPI transaction

The latest NPCI nod may lead to an increase in UPI transaction volumes for Paytm in coming days.

It maybe recalled Paytm’s associate entity Paytm Payments Bank Ltd (PPBL) faced had faced crippling restrictions from the banking regulator in January this year. 

Paytm’s market share on UPI had slipped from 13 per cent in January to about 7 per cent in September 2024 on the back of RBI’s embargo to add new users. 

Paytm’s UPI service was powered by PPBL and consequent to the RBI action, the company had to transition to a third party app model.

In February, the RBI had advised the NPCI to consider Paytm’s request to become a Third-Party Application Provider (TPAP) for continued UPI operation of the app. 

This was subject to the condition that no new users would be added by Paytm until all existing users were successfully migrated to a new handle.

In March, Paytm was allowed to function as a third party application provider (TPAP) on UPI.

Currently, HDFC Bank, State Bank of India (SBI), YES Bank and Axis Bank act as payment service providers (PSPs) to Paytm as part of the arrangement.