Paytm has received approval from the National Payments Corporation of India (NPCI) to onboard new UPI users, ending a nine-month embargo imposed by the Reserve Bank of India (RBI). This decision is expected to increase Paytm’s UPI transaction volumes and boost its market position.
Background
In January 2024, the RBI restricted Paytm Payments Bank Limited (PPBL) from adding new UPI users due to supervisory concerns. The company’s UPI market share dropped from 13% to 7%. In March, Paytm was permitted to operate as a Third-Party Application Provider (TPAP) using four banks—SBI, Axis Bank, HDFC Bank, and YES Bank—but without onboarding new users.
Approval and Impact
On October 22, 2024, NPCI granted Paytm permission to onboard new users, subject to procedural guidelines and agreements with its Payment Service Provider (PSP) banks. This move brings relief to Paytm, which had faced a significant setback in UPI operations due to the RBI’s earlier restrictions.
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