Paytm gets a third-party license from NPCI. What does this mean for you?

livemint.com:

Paytm a Third-Party Application Provider (TPAP) licence, just a day ahead of the closure of its Paytm Payments Bank (PPBL) arm. The Reserve Bank of India (RBI) had directed PPBL to wind down services from March 15 after it was subjected to regulatory scrutiny due to non-compliance with KYC norms and other mandated processes. The license is thus a big relief for Paytm, whose share price hit 5% upper circuit on March 15.

So, what does this mean for customers? While PPBL's wallet, deposits, credit transactions, and FASTag recharge services are halted from March 15 onwards, you can now use the Unified Payments Interface or UPI function. Also Read | Paytm Payments Bank to close from March 15. Here's all that customers need to know According to the NPCI release, four banks — Axis Bank, HDFC Bank, State Bank of India, and YES Bank, shall act as Payment System Provider (PSPs) banks to PPBL's parent company One97 Communications.

Thus users can link their bank accounts to Paytm (similar to what they do for apps like PhonePe, etc.) and continue to access the UPI function routed through the banks. Further, the release said that YES Bank has been named as the acquiring bank for all @paytm handles. This means that all users with the "@paytm" accounts will see their UPI transactions being redirected to YES Bank.

Paytm has been directed to complete this migration for all existing handles "at the earliest", the release added. Paytm recorded 1.41 billion monthly transactions worth ₹1.65 trillion in February this year, down from 1.57 billion transactions worth ₹1.93 trillion in January, data on the NPCI website showed. The app sees the majority (around 75 percent) of its gross merchandise value (GMV) drawn from in-app UPI transactions.