Paytm likely to move majority merchant accounts to Yes Bank: Report

Paytm-parent One97 Communications Ltd (OCL) has reportedly signed a deal to move its merchant accounts to Yes Bank. Paytm has also applied for a third-party application provider licence from the National Payment Corporation of India (NPCI) in collaboration with Yes Bank and Axis Bank, NDTV Profit reported, citing sources.

Approval from the NPCI is expected shortly as the deal has almost been finalised and the requisite documents have been submitted, the report said. With this, it added, the two lenders - Yes Bank and Axis Bank - would become the payment service providers for Paytm for its UPI channel. 

UPI is the country's real-time payment system, operated by the NPCI. Yes Bank and Axis Bank are among the largest lenders in the UPI transaction space. 

As per the data available on NPCI, Yes Bank processed Rs 34,198 crore of pay and 40,443 crore of receipt transactions, the highest among all banks. It was followed by Axis Bank, which processed Rs 31,831 crore in pay and 16,961 crore in receipt transactions in the same month.

Earlier this week, Reuters reported that Paytm was likely to partner with Axis Bank, HDFC Bank, State Bank of India, and Yes Bank for processing transactions via UPI. 

The RBI has asked Paytm Payments Bank, the banking unit of Paytm, to wind down its business by March 15. The central bank, last week, asked the NPCI to examine a request from Paytm to become a third-party application provider and to facilitate four-to-five banks to act as service providers for it.

Paytm is the third-largest app for UPI payments in the country, processing 1.6 billion monthly transactions, according to data available on the NPCI website. Paytm's users will migrate to an updated UPI handle of the partner bank, according to Reuters.