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Paytm Gets Third-party Licence from NPCI

  • 23 Mar 2024
  • 2 min read

Source: TOI

The National Payments Corporation of India has recently granted approval to Paytm-owner One97 Communications Ltd to participate in Unified Payments Interface (UPI) as a Third-Party Application Provider (TPAP) under the multi-bank model.

  • Axis Bank, HDFC Bank, State Bank of India, and YES Bank will act as Payment System Provider (PSP) banks to Paytm.
    • Previously, Paytm operated through its own payments bank licence. However, due to regulatory non-compliance, RBI imposed several restrictions on Paytm Payments Bank.
  • TPAPs are entities facilitating UPI payments by connecting customers and merchants through applications or platforms.
    • They serve as intermediaries, ensuring seamless transactions and play a vital role in the UPI ecosystem, handling millions of transactions daily.
  • NPCI, formed as a collaboration between the RBI and Indian Banks’ Association (IBA) under the Payment and Settlement Systems Act, 2007 operates as a not-for-profit entity to enhance India's payment and settlement infrastructure.
    • It aims to provide both physical and electronic payment solutions to the banking sector, leveraging technology to drive operational efficiency and expand payment system accessibility.

Read more: RBI Imposes Restrictions on Paytm Payments Bank

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