Paytm parent One97 Communications receives third-party app license from payments authority: 5 things to know

Paytm latest news: One97 Communications, the parent of digital payments firm Paytm, on Thursday received approval from the National Payments Corporation of India (NPCI) to participate in the country's popular Unified Payment Interface (UPI) as a third-party application provider (TPAP) under the multi-bank model. The TPAP licence will allow customers to continue using mobile app Paytm for payments through UPI even as Paytm Payments Bank ceases operations by March 15.

NPCI grants approval to One97 Communications Limited (OCL) to participate in UPI as a Third-Party Application Provider (TPAP) under multi-bank model.@dilipasbe

Read more here: https://t.co/XuJpyiiRNq

— NPCI (@NPCI_NPCI) March 14, 2024

UPI, operated by the NPCI, is the country's real-time payment system that allows users to transfer money across banks. 

Here are five things to know about this story: 

• Four banks, including HDFC Bank and State Bank of India, will act as Payment System Provider (PSP) lenders to One97 Communications, according to a press release by NPCI.
• The '@Paytm' handle shall be redirected to YES Bank, which will enable existing users and merchants to continue to do UPI transactions and AutoPay mandates in a seamless and uninterrupted manner, it said. 
• NPCI also said that One97 Communications had been advised to complete the migration for all existing handles and mandates, wherever required, to new PSP banks at the earliest.
• Paytm, the third-largest app for UPI payments in the country, processed 1.41 billion monthly transactions in February down from 1.57 billion transactions in January, according to data available on the NPCI website.
• Earlier, the RBI set a deadline of March 15 for Paytm Payments Bank to wind down its operations. Paytm Payments Bank cannot accept any fresh deposits into its accounts or wallets after March 15.

What is UPI?

The Unified Payments Interface (UPI), as the name suggests, is a real-time payment system that allows users to instantly transfer money between bank accounts through a mobile platform. Introduced by the NPCI to facilitate seamless and secure transactions, the UPI has emerged as a popular mode of mobile app-based fund transfers in the country. It has revolutionised the digital payment landscape in the country by offering a secure, efficient and user-friendly platform for conducting financial transactions.

How does UPI work?

When a user initiates a transaction through a UPI-enabled app, the platform connects with the payer's and payee's bank accounts, eliminating the need for entering bank details. UPI operates 24x7, enabling users to make payments anytime, anywhere.

What are the key advantages of UPI?

UPI offers a slew of advantages such as immediate fund transfer, no additional charges and a simplified payment process, while promoting financial inclusion by providing a convenient payment solution to individuals across different economic backgrounds.