Paytm further said that the firm may continue to onboard new offline merchants and offer them payment services including all-in-one QR, soundbox, card machine etc.
The Reserve Bank of India (RBI) has asked Paytm Payments Services Limited to resubmit the application to operate as a payment aggregator. The banking regulator has the onboarding of online merchants by Paytm payment services. Pending approval, the company will not onboard new online merchants.
In an exchange filing the company said, "Our 100% subsidiary, Paytm Payments Services Limited ("PPSL"), is receiving a letter from the Reserve Bank of India ("RBI") in response to an application from PPSL for authorisation. To provide payment aggregator services (the “PA Application”) for online merchants.
One97 Communications (OCL), which owns the Paytm brand, transferred its payment aggregator services business to Paytm Payments Services (PPSL) in December 2020 to comply with the Reserve Bank of India's Payment Aggregator (PA) guidelines. had proposed to do. RBI) but the banking regulator had rejected his application.
The company resubmitted the necessary documents in September 2021.
As per the letter, PPSL has to take the following steps and resubmit the PA application within 120 calendar days:
1. Obtain necessary approval for previous investment in PPSL from company to comply with FDI guidelines
2. Not onboarding new online merchants
There are no physical observations other than those described above. This has not had any material impact on our business and revenue, as the RBI communication applies only to the onboarding of new online merchants.
Paytm further said that the firm may continue to onboard new offline merchants and offer them payment services including all-in-one QR, soundbox, card machine etc.
Similarly, PPSL can continue to do business with existing online merchants for whom services will remain unaffected.
The firm said it expected to obtain necessary approvals in a time-bound manner and resubmit the application. PAs are entities that facilitate e-commerce sites and merchants to accept various payment instruments from customers to meet their payment obligations, without the need for merchants to build a separate payment integration system of their own. .
As per the PA guidelines of RBI, an entity cannot continue to provide payment aggregator services as well as e-commerce marketplace and such payment aggregator services should be segregated from e-commerce marketplace business.
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