MUMBAI: The RBI has asked Paytm Payment Services (PPSL), a 100% subsidiary of parent company One97 Communications, to not onboard any new online merchants for its payment services. This follows the company not immediately getting an authorisation from RBI to provide payment aggregator services.
The company has said it can continue to onboard new offline merchants and offer them payment services, including All-in-One QR, Soundbox, and Card Machines. Similarly, PPSL can continue to do business with existing online merchants, for whom the services will remain unaffected.
Payment aggregators were required to be registered with RBI by September 2022. Earlier, these companies providing payment aggregator services were treated as outsourcing agents of banks. With payment aggregators being recognised as independent service providers, they need to register and subject themselves to RBI regulation.
Paytm said in its regulatory filing that RBI has asked PPSL to seek necessary approval for past downward investment from the company to PPSL and to comply with the foreign direct investment guidelines. “This has no material impact on our business and revenues since the communication from RBI applies only to onboarding of new online merchants,” it said.
The filing by Paytm comes at the end of a week when its share price came under severe pressure. In March, RBI barred Paytm Payments Bank, since then it has shifted focus to its lending business and has been reassuring investors it will achieve profitability earlier than anticipated.
The company has said it can continue to onboard new offline merchants and offer them payment services, including All-in-One QR, Soundbox, and Card Machines. Similarly, PPSL can continue to do business with existing online merchants, for whom the services will remain unaffected.
Payment aggregators were required to be registered with RBI by September 2022. Earlier, these companies providing payment aggregator services were treated as outsourcing agents of banks. With payment aggregators being recognised as independent service providers, they need to register and subject themselves to RBI regulation.
Paytm said in its regulatory filing that RBI has asked PPSL to seek necessary approval for past downward investment from the company to PPSL and to comply with the foreign direct investment guidelines. “This has no material impact on our business and revenues since the communication from RBI applies only to onboarding of new online merchants,” it said.
The filing by Paytm comes at the end of a week when its share price came under severe pressure. In March, RBI barred Paytm Payments Bank, since then it has shifted focus to its lending business and has been reassuring investors it will achieve profitability earlier than anticipated.
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