Updated February 23rd, 2024 at 20:05 IST

Are you using Paytm: Here are the 10 things you need to know

Amid the Reserve Bank of India directive to NPCI for reviewing the third-party application status, or @paytm handle of the fintech, what is at stake for users?

Reported by: Business Desk
RBI on Paytm crisis | Image:Paytm CEO Vijay Shekhar Sharma, RBI Governor Shaktikanta Das
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The Reserve Bank of India on Friday has mandated for the NPCI, or the digital payments authority to review Paytm’s application for becoming a third-party application provider for UPI system.

Meanwhile, this is what it means for you:

  1. Paytm’s handle, @paytm will now have new backends: The National Payments Corporation of India (NPCI) may facilitate the certification of 4-5 banks as Payment Service Provider (PSP). This means banks with demonstrated capabilities will be incharge of processing high-volume UPI transactions.
     
  2. Multiple banks will be given authority to channel Paytm’s payments: With Paytm announcing its partnership with Axis bank for third-party bank partnership, the RBI directive also creates an opportunity for other private lenders such as HDFC.  
     
  3. All existing users will be migrated to the certified vendors of select banks: Users are likely to get a designated set of newly identified banks to support the application.
     
  4. Onboarding of new customers will resume after all existing users are moved.
     
  5. Holders of FASTag and wallets are still mandated to move their accounts to other aggregators, like Airtel Payments Bank or banking partners like HDFC and ICICI Bank.
     
  6. This directive does not affect users whose UPI handles do not end in @paytm
     
  7. Merchants using Paytm and its QR codes may need settlement accounts: To ensure the continuity of Paytm's QR code system, RBI has sought for Paytm to establish settlement accounts with one or more banks. 
     
  8. The last date for moving default Paytm Payments Bank accounts is unchanged at March 15.
     
  9. The RBI on January 31 had given one month, or till Feb 29 for Paytm to completely shut its Paytm Payments Bank, which would also wind down other arms such as wallets and FASTags. 
     
  10. In 2022, RBI had halted onboarding for PPLB over non-compliance with the apex regulator.

 

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Published February 23rd, 2024 at 20:05 IST