Paytm gets approval to add new UPI users; shares surge after this development
Paytm: According to a business release, Paytm has been given permission by the National Payments Corporation of India (NPCI) to onboard new UPI customers. Paytm‘s stock jumped 6.06 percent to Rs 729 a share on the BSE in morning trading after the event.
The action is anticipated to soothe Paytm, which was negatively impacted by the Reserve Bank of India’s earlier this year limits on affiliate business Paytm Payments Bank Limited (PPBL)’s ability to onboard new UPI customers on the Paytm app.
On the BSE, the Paytm stock began Wednesday at Rs 715.5, up 4.1%. Within minutes, it had risen to Rs 729, but within 30 minutes, it had dropped to Rs 710, which was around 3% higher than its closing price yesterday.
According to the announcement, Paytm’s NPCI clearance is contingent upon compliance with all procedural rules and circulars.
Paytm received clearance from the NPCI in March to join UPI as a Third-Party Application Provider (TPAP). SBI, Axis Bank, HDFC Bank, and Yes Bank are the four banks through whom the NPCI permitted the firm to conduct UPI transactions.
Paytm notified the BSE in a late-night filing on Tuesday that the NPCI has given them permission to onboard new UPI customers.
The Paytm filing, which also included the NPCI letter granting the nod, stated, “We would like to inform you that via letter dated October 22, 2024, the National Payments Corporation of India (NPCI) has granted approval to the company to onboard new UPI users, with adherence to all NPCI procedural guidelines and circulars.”
The letter states that approval is contingent upon compliance with all NPCI procedural guidelines and circulars, including those that are specifically related to risk management, app and QR brand guidelines, multi-bank guidelines, TPAP market share, and customer data.
Additionally, the business must follow the guidelines set out in the tri-partite agreement with PSP Banks and NPCI.
According to the NPCI letter sent to One97 Communications’ founder and CEO, Vijay Shekhar Sharma, it has also been asked to “adhere to all laws and regulatory guidelines as applicable and issued from time to time, including Payments and Settlement Act 2007, Information Technology Act 2000, Digital Personal Data Protection Act 2023, and Circular on Storage of Payment System Data, 2018.”
The parent company of the financial startup Paytm is One97 Communications.
The NPCI stated that One97 Communications (OCL) had written to it on August 1 asking for permission to onboard new UPI users on the Paytm app, which had been halted in accordance with RBI directives dated January 31 and February 16. This was in addition to allowing OCL to onboard new users on its UPI application.
The Paytm filing said, “After reviewing your request, we hereby grant our approval and permit One97 Communications Private Limited (OCL) to onboard new users on their UPI application,” outlining the different requirements.
Citing continuous non-compliance and ongoing serious supervisory concerns, the RBI took significant action against Paytm Payments Bank (PPBL) on January 31 and ordered it to cease taking deposits or top-ups in any client accounts, wallets, FASTags, and other instruments.
