The Reserve Bank of India (RBI) has announced a set of additional steps, following up on its actions against the Paytm Payments Bank. These steps aim to assist customers using the ‘@paytm’ handle, operated by the Paytm Payments Bank, and to minimize what the RBI described as a “concentration risk in the UPI system by having multiple payment app providers.”
It may be recalled that the Paytm Payments Bank is barred from accepting further credits into its customer accounts and wallets after March 15, 2024.
In its new notification, the RBI stated that the NPCI, which operates the UPI, has been advised to consider the request of One97 Communication Ltd (OCL) to become a Third-Party Application Provider (TPAP) for the UPI channel for uninterrupted UPI operation of the Paytm app, as per the norms.
If the OCL receives the TPAP status, the ‘@paytm’ handles are to be migrated from Paytm Payments Bank to a set of newly identified banks to avoid any disruption. However, no new users can be boarded by the TPAP until the migration work is completed.
“For seamless migration of ‘@paytm’ handle to other banks, NPCI may facilitate certification of 4-5 banks as Payment Service Provider (PSP) Banks with demonstrated capabilities to process high volume UPI transactions. This is in line with NPCI norms for minimising concentration risk,” the bank said.
The bank also clarified that the migration of handles is only applicable to customers and merchants who have the ‘@paytm’ UPI handle. Those who have another UPI address or handle other than ‘@paytm’, no action is required.
“Similarly, the customers, whose underlying account/ wallet is currently with Paytm Payments Bank, are advised to make alternative arrangement with other banks well before March 15, 2024…” the bank added.
The latest steps come days after the central bank made brief relaxations for customers affected by its business restrictions imposed on Paytm Payments Bank.
The RBI has extended the earlier stipulated timeline from February 29, 2024, to March 15, 2024, for further deposits, credit transactions, or top-ups in customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. The same timeline extension has been given to banking services such as fund transfers, BBPOU, and UPI facilities.
Separately, Google on Thursday announced that its SoundPod, an audio device that helps merchants track QR code payments with audio alerts when a payment is received – will be available for small merchants across India over the coming months. The SoundPod is very similar to the Paytm Soundbox and PhonePe SmartSpeaker.
