Paytm Gets NPCI Nod to Onboard New UPI Users
India's Paytm, owned by One97 Communications Limited, has received approval from the National Payments Corporation of India (NPCI) to onboard new users on its Unified Payments Interface (UPI) app, sources said. The permission came following a suspension order by the Reserve Bank of India (RBI) before this year, which had frozen the addition of new UPI users.
In a notice dated October 22, 2024, One97 Communications communicated this decision of the NPCI to the stock exchanges, where the company can go back to onboard fresh UPI users in step with the NPCI's directives. The NPCI has approved on the request made by Vijay Shekhar Sharma, Founder and CEO of One97 Communications, in the letter dated August 1, 2024. This was, in fact, a request for lifting the restrictions that were imposed by the RBI during January and February 2024.
Under seeming reversal, RBI suspended the onboard process to strengthen security measures so that regulatory protocols in the digital payments ecosystem are complied with. Paytm can continue its expansion of the UPI user base after agreeing to certain terms and conditions as spelt out by NPCI.
One97 Communications shall adhere to NPCI's procedural guidelines, such as risk management, multi-bank and market share regulations that need to be adhered by Third-Party Application Providers (TPAP), and brand guidelines of the application and the QR codes. The company shall also observe tripartite agreement regulations made between NPCI and PSP banks.
Paytm would also comply with major regulations in the order of the 2007 Payments and Settlement Act, the 2000 Information Technology Act, the 2023 Digital Personal Data Protection Act, and the NPCI 2018 circular regarding storing data of the payment system.
With this announcement, Paytm is trying to establish itself as a significant player in the highly competitive UPI market in India which has grown exponentially in the past few years. The vendor will use this approval as a way to regain lost momentum and continue its aggressive expansion of the business in the burgeoning space of digital payments.