RBI issued additional steps necessary to ensure seamless digital payments

Paytm app Latest News: While the Paytm Payments Bank cannot accept further credits into its customer accounts and wallets after March 15, 2024, RBI has issued additional steps which are necessary to ensure seamless digital payments by UPI customers using Paytm handle operated by the Paytm Payments Bank, and minimise concentration risk in the UPI system by having multiple payment app providers. 

The additional steps are as follows:

i) National Payments Corporation of India (NPCI) has been advised by the RBI to examine the request of One97 Communication Ltd (OCL) to become a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm app, as per the norms.

ii) It has been further advised that in the event of NPCI granting TPAP status to OCL, it may be stipulated that @paytm' handles are to be migrated in a seamless manner from Paytm Payments Bank to a set of newly identified banks to avoid any disruption. No new users are to be added by the said TPAP until all the existing users are migrated satisfactorily to a new handle.

iii) 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.

iv) For the merchants using PayTM QR Codes, OCL may open the settlement accounts with one or more PSP Banks (other than Paytm Payments Bank).

RBI also clarified that:

1) the migration of UPI handles as above is applicable only to such customers and merchants who have a UPI handle '@Paytm'. For others who have a UPI address by them or handle other than @Paytm', no action is required to be taken 

ii) 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, as already advised in the FAQs released by RBI on February 16, 2024.

RBI reiterated that the holders of FASTag and National Common Mobility Cards (NCMC) issued by Paytm Payments Bank, may make alternative arrangements before March 15, 2024 to avoid any inconvenience.