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Paytm Forges Strategic Alliance with SBI Amid Regulatory Storm

Navigating Regulatory Rapids, Paytm's Strategic Pivot in the UPI Arena

14 March 2024

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Kunal Tyagi

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  • Paytm partners with SBI to continue consumer UPI payments amid RBI restrictions on PPBL.

  • One97 Communications shifts nodal accounts to Axis Bank, ensuring continuity in digital payments acceptance through Paytm.

  • Impending TPAP license approval by NPCI solidifies Paytm's position in the UPI landscape, enabling continued UPI-based payments through the app.

In a strategic move to adapt to regulatory challenges, Paytm, a leading player in India's digital payments sector, has partnered with the State Bank of India (SBI) to continue its consumer UPI payments. The move comes following the Reserve Bank of India's (RBI) imposition of business restrictions on Paytm Payments Bank Limited (PPBL), prompting Paytm's parent company, One97 Communications, to explore third-party application provider (TPAP) partnerships to sustain its UPI ecosystem.


Previously, Paytm had established TPAP collaborations with Axis Bank, Yes Bank, and HDFC Bank, as reported by Moneycontrol. However, the latest partnership with SBI underscores Paytm's commitment to ensuring uninterrupted services for its users amidst regulatory changes.


To facilitate a smooth transition for merchants, One97 Communications (OCL) has shifted its nodal accounts to private-sector lender Axis Bank, ensuring continuity in digital payments acceptance through Paytm beyond the regulatory deadline of March 15. This strategic maneuver aims to maintain operational stability and uphold customer trust during a period of regulatory transition.


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The impending approval of a TPAP license by the National Payments Corporation of India (NPCI) further solidifies Paytm's position in the UPI landscape. The license would enable Paytm to continue offering UPI-based payments through its app, mitigating the impact of PPBL's cessation of operations mandated by regulatory actions.


Axis Bank's role as a payment partner for major UPI players underscores the significance of strategic partnerships in navigating regulatory complexities. With TPAP licenses being a prerequisite for UPI operations, Paytm's collaboration with SBI reaffirms its commitment to compliance and customer service excellence.


As Paytm navigates the regulatory landscape, its focus remains on enhancing user experience and maintaining operational resilience. The strategic partnerships forged with leading banks like SBI and Axis Bank exemplify Paytm's proactive approach to regulatory compliance and business continuity in India's dynamic digital payments ecosystem.


In conclusion, Paytm's partnership with SBI marks a strategic shift aimed at overcoming regulatory challenges and ensuring uninterrupted UPI services for its users. With the impending TPAP license approval and continued collaboration with banking partners, Paytm reaffirms its position as a pioneering force in India's digital payments landscape, poised to drive innovation and foster financial inclusion in the years ahead.


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