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NPCI grants Paytm approval to onboard new UPI users, reversing the RBI's earlier restrictions. This decision could positively impact Paytm's business growth and Paytm share price.
In a significant development for Paytm, the National Payments Corporation of India (NPCI) has granted approval to One97 Communications Ltd (OCL) to onboard new Unified Payments Interface (UPI) users. This follows restrictions imposed earlier this year by the Reserve Bank of India (RBI) on Paytm Payments Bank Limited (PPBL), which had barred the fintech company from adding new UPI users to its platform.
This move is expected to give Paytm a much-needed boost after the January 31 order that halted its UPI expansion. With NPCI’s green light, Paytm will now be able to continue onboarding users, provided it complies with procedural guidelines and circulars related to risk management, data protection, and UPI market share.
Paytm’s approval comes with strict adherence to NPCI’s guidelines, including the Payment and Settlement Systems Act, 2007, and the Digital Personal Data Protection Act, 2023. Additionally, the company must meet conditions outlined in its tri-partite agreement with NPCI and Payment Service Provider (PSP) banks. Paytm will operate through key banking partners such as SBI, HDFC Bank, Axis Bank, and YES Bank for UPI services.
This decision follows an appeal made by Paytm on August 1, 2024, where it requested the NPCI to reconsider its ability to onboard new UPI users. After an extensive review, NPCI has permitted Paytm to move forward, enabling it to strengthen its UPI services.
The approval is anticipated to enhance Paytm’s growth prospects, allowing it to tap into the rapidly expanding digital payments market. As UPI remains a dominant payment method in India, Paytm’s ability to onboard new users could positively impact its market share. Additionally, this development could influence Paytm share price favourably as it revives its UPI business segment, which is crucial to its overall revenue generation.
The NPCI’s approval marks a significant turnaround for Paytm, as the company can now resume onboarding new UPI users after a months-long hiatus. This step positions Paytm to compete more effectively in the digital payment ecosystem, potentially boosting its market value and service offerings.
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