“Report: Paytm Considering Collaboration with Four Banks for UPI Transactions”

Paytm Explores Partnerships with Leading Banks Amid Regulatory Pressure

In response to regulatory directives to wind down its operations by March 15, Paytm Payments Bank, a key player in India’s digital payment sector, is reportedly considering partnerships with major banks for Unified Payments Interface (UPI) transactions.

According to sources familiar with the matter, Paytm is in discussions with Axis Bank, HDFC Bank, State Bank of India (SBI), and Yes Bank to facilitate transactions through UPI, India’s real-time payments system operated by the National Payments Corporation of India (NPCI). These partnerships aim to ensure seamless transaction processing and mitigate disruptions caused by regulatory measures.

The Reserve Bank of India (RBI) has instructed NPCI to assess Paytm’s request to become a third-party application provider, with plans to engage four to five banks as service providers. Talks are underway to onboard banking partners, prioritizing institutions with robust technological capabilities to manage high transaction volumes efficiently.

While official statements from HDFC Bank, Yes Bank, SBI, and Paytm are awaited, Axis Bank and NPCI declined to comment on the matter. However, insiders suggest that Axis Bank is likely to be the initial banking partner, with others expected to follow suit.

The NPCI is anticipated to conduct a comprehensive evaluation of the bank’s technology and infrastructure, a process estimated to take approximately one month.

With 1.6 billion monthly transactions, Paytm ranks as the third-largest UPI payment app in India, trailing behind PhonePe and Google Pay. As part of the transition, Paytm users will migrate to an updated UPI handle provided by the partner bank, ensuring continuity of services.

Prashant Kumar, CEO of Yes Bank, emphasized adherence to RBI regulations and a thorough assessment of associated risks and commercial viability. He affirmed the bank’s readiness to engage in business with Paytm within regulatory guidelines.

The move to forge partnerships reflects Paytm’s commitment to sustain operations and serve its vast user base while navigating regulatory constraints. As the fintech giant navigates this transition, stakeholders await further developments in its strategic alliances and the implications for India’s digital payment ecosystem.

Sources By Agencies

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