Paytm may seek third-party payment app status for UPI integration, says report

livemint.com:

Paytm parent One97 Communications is mulling the option of continuing its payments service as a third-party payment app (TPAP) to ensure continued access to the Unified Payments Interface (UPI) for its customers, The Economic Times reported citing sources. Talks on the same have commenced with the National Payments Corporation of India (NPCI), the entity overseeing the UPI ecosystem in the country, it added. Also Read | Ashneer Grover on Paytm Crisis: 60-year-olds running RBI do not… Following the RBI's regulatory directive, the Paytm app will transition to a third-party app, integrating UPI through other lenders.

At present, Paytm UPI users have virtual payment addresses (VPAs) ending in @paytm. Starting March 1, this might transition to handles associated with other banks. To address this, Paytm plans to collaborate with three or more banks to issue new VPAs to its customers, with HDFC Bank, Axis Bank, and Yes Bank being potential contenders.

Paytm Payments Bank (PPBL) is also in discussions to transfer the nodal accounts of Paytm merchants to other lenders, pending detailed FAQs from the regulator. This move aligns Paytm with other third-party payment apps such as PhonePe, Google Pay, and Amazon Pay, among the 22 TPAPs operating on UPI. Notably, competitors such as PhonePe have witnessed a 15-20 percent increase in their user base in the week following the RBI notice to Paytm, as per the report.