Paytm Payments Services Ltd (PPSL) is a subsidiary of One97 Communications Ltd (OCL), the parent of Paytm.
PPSL has been awaiting regulator nod to offer Payment Aggregator (PA) services since 2020. RBI had rejected its payment aggregator licence application in November 2022, instructing the company to reapply with compliance under foreign direct investment (FDI) norms. The rejection was accompanied with restriction to onboard new customers in 2022.
(PAs are entities that help e-commerce sites and merchants to accept various payment instruments from customers for completion of their payment obligations without the need for merchants to create a separate payment integration system of their own)
Since then the Company was engaged with the regulator to get the requisite approvals.
RBI now finally has given the in-principle approval to PPSL to operate as an online payment aggregator under the Payment and Settlement Systems Act, 2007. Restriction on new customers has also been lifted.
The RBI’s approval comes with some regulatory conditions. It has advised PPSL to conduct a system audit, including a cyber security audit, and submit a report within six months, failing which the in‑principle authorisation will lapse and final approval will not be granted.
Additionally, PPSL is required to comply with the RBI’s guidelines pertaining to obtaining prior approval in cases of change in shareholding, acquisition of control, or transfer of payment system operations for non-bank payment system operators.
The development paves way for Paytm to expand its digital payments infrastructure.