Paytm Secures Third-Party App License Amid Banking Unit Turmoil

The digital payments giant Paytm has been granted a third-party application provider license by India's payments authority, allowing it to continue operations despite its banking unit's impending halt.

Paytm, formally known as One 97 Communications, received a third-party application provider license from the National Payments Corporation of India (NPCI), enabling it to facilitate payments through the unified payment interface (UPI) after its banking unit ceases operations.
The Reserve Bank of India (RBI) had ordered Paytm Payments Bank to halt most operations by March 15 due to compliance breaches, leading to a significant staff reduction of about 20 percent in the banking unit.
Axis Bank, HDFC Bank, State Bank of India, and Yes Bank will act as payment system provider banks to Paytm, with Yes Bank also serving as a merchant acquiring bank for UPI merchants.
Paytm's banking unit, which processed the majority of its transactions, faced its worst crisis with a 54 percent loss in share value since the regulatory clampdown.
Despite the challenges, Paytm continues to serve over 300 million users and more than 10 million merchants in India, ensuring uninterrupted UPI transactions and AutoPay mandates.