RBI allows Paytm Payments to continue online Payment Aggregator business as it awaits govt approval

Paytm Payments Services Limited (PPSL) has received an extension of time from the Reserve Bank of India (RBI) to resubmit its application for a Payment Aggregator (PA) license.

Paytm is seeking FDI approval from the Government of India for investment in their own 100 per cent owned subsidiary Payment Payments Services Limited.

The extension allows PPSL to continue its online payment aggregation business while it awaits approval from the Government of India (GoI) for past investments from One 97 Communications Limited (OCL) into PPSL, in accordance with Foreign Direct Investment (FDI) guidelines.

PPSL must submit its application for authorization to operate as an online PA within 15 days of receiving approval from the GoI. If the GoI makes any adverse decisions, PPSL must immediately inform the RBI. During this process, PPSL is permitted to continue its online payment aggregation business for existing partners but cannot onboard new merchants.

Paytm's payment aggregator licence application was rejected by the RBI in November last year and they were asked to reapply after meeting specific requirements within 120 days.

The extension of time for resubmission of the application has no material impact on PPSL's business or revenues. The communication from the RBI applies only to onboarding new online merchants, while PPSL can still provide payment services to its existing online merchants. 

Additionally, OCL can continue to onboard new merchants and offer payment services to them, including All-in-One QR, Soundbox, and Card Machines, for its offline business.