Paytm gets a nod from NPCI to onboard new UPI users

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

This comes almost nine months after the Reserve Bank of India (RBI) imposed an embargo on new customer entry.

However, the latest NPCI approval is 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 said.

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

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

Increase in UPI transactions

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

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

Paytm’s market share on UPI had fallen from 13 per cent in January to around 7 per cent in September 2024 due to RBI’s embargo on adding new users.

Paytm’s UPI service was powered by PPBL and due to the RBI action, the company had to move 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 the continued UPI operation of the app.

The condition was that no new users would be added by Paytm until all existing users had been 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 serve as payment service providers (PSPs) for Paytm as part of the agreement.