Paytm begins transferring users to new UPI IDs

Paytm begins transferring users to new UPI IDs

All Paytm users with @paytm handles will eventually be prompted to switch to a new UPI handle with their permission.

Starting on April 17, One97 Communications Limited (OCL), the company that powers Paytm, began migrating its clientele to partner payment service provider (PSP) institutions, including Axis Bank, HDFC Bank, SBI, and Yes Bank.

Prior to the RBI's severe fines on Paytm Payments Bank Limited (PPBL), an affiliate firm of OCL, serving as the PSP bank for Paytm UPI clients, this arrangement was unworkable.

A PSP is a bank that facilitates communication between the UPI app and the banking channel. PSPs can only be banks.

Every Paytm UPI user will get a pop-up notice asking for permission before using Paytm with a new UPI ID that has one of the four handles, such as @ptsbi, @pthdfc, @ptaxis, or @ptyes.

Paytm has accelerated the integration with Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank in response to NPCI's clearance on March 14, 2024, to onboard OCL as a Third-Party Application Provider (TPAP). In a statement to stock markets, the firm said that all four banks are now active on the TPAP, expediting the procedure for Paytm to move customer accounts to these PSP institutions.

On March 14, the NPCI authorized OCL to use the multi-bank model to engage in UPI services as a TPAP. After its banking business, PPBL, halted operations after March 15 due to regulatory action, Paytm will be able to continue providing UPI services to its app customers with the much-awaited license.

Data on the National Payments Corporation of India (NPCI) website shows that Paytm's UPI market share fell to nine percent in March, the lowest in the previous four years. UPI is managed by NPCI.

In February, it fell to 11% from the previous month due to severe limitations imposed by the RBI on its affiliated subsidiary, Paytm Payments Bank Limited (PPBL).