SBI partners with Paytm for its UPI business: Report

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The State Bank of India has reportedly partnered with Paytm parent organisation One97 Communications for its consumer UPI payments. Paytm’s UPI ecosystem depended on Paytm Payments Bank Limited (PPBL). Since the Reserve Bank of India imposed business restrictions on the payments bank, One97 Communications has been trying to enter into partnerships to become a third-party application provider (TPAP).

Earlier, Paytm had partnered with Axis Bank, Yes Bank and HDFC Bank for third-party application provider (TPAP) partnerships, Moneycontrol reported. 

BT could not verify the report independently.

Last month, One 97 Communications (OCL) shifted its nodal accounts or escrow accounts to private-sector lender Axis Bank, the company said in a filing to the BSE. This would ensure that merchants who accept digital payments through Paytm will be able to continue doing so even after the deadline ends on March 15.

The National Payments Corp of India (NPCI) is likely to approve a third-party application provider (TPAP) license for Paytm by March 15. 

The TPAP license will allow customers to continue using the Paytm app for payments through unified payment interface (UPI), even as its banking arm, Paytm Payments Bank, ceases operations by March 15, following regulatory action due to issues of non-compliance.

“The (TPAP license) approval will come before March 15 and most of the checks have been completed. While the integration with banks may take more than a month, the license approval should be in place before the deadline ends,” sources told Reuters.

TPAPs are responsible for complying with guidelines prescribed by both NPCI and their partner PSPs (banks) and facilitate RBI, NPCI, and other agencies to access their data, information, and systems with respect to UPI transactions. About 22 entities, including Amazon Pay, Google Pay, Mobikwik, PhonePe, and WhatsApp, currently have a TPAP licence.

Axis Bank is a payment partner for most major UPI players, such as Amazon Pay, Google Pay, and PhonePe.

RBI had asked Paytm Payments Bank to wind down its operations and shut its nodal accounts effective February 29. Later, it extended the end date to March 15.

Paytm is the third-largest app for UPI payments in the country. It processed 1.41 billion monthly transactions worth Rs 1.65 lakh crore ($19.94 billion) in February.

PhonePe and Google Pay are the two largest UPI payment apps in India. They are also third-party application providers.

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