Paytm Begins User Migration To New UPI IDs After NPCI’s Approval
The National Payments Corporation of India (NPCI) has recently approved Paytm’s parent company, One 97 Communications (OCL), to migrate its users to new partner banks for Unified Payments Interface (UPI) transactions. In March 2024, the NPCI approved OCL to function as a Third-Party Application Provider (TPAP) under a multi-bank model, allowing Paytm to operate UPI services through collaborating banks.
Background
On 31st January 2024, the Reserve Bank of India (RBI) barred Paytm Payments Bank Ltd (PPBL), a subsidiary of Paytm from obtaining further deposits and top-ups in its accounts or wallets from 29th February 2024. This action of RBI against PPBL is due to the Know Your Customer (KYC) violations in PPBL.
PPBL independent director Manju Agarwal resigned from the board with effect from 1st February 2024, after the announcement of regulatory actions against PPBL by the RBI.
In response to the RBI’s actions, Paytm announced plans to collaborate with other banks instead of PPBL, to continue offering the UPI services.
How has Paytm been operating since RBI’s order?
Since 15th March 2024, Paytm has been functioning as a TRAP and not as a payments bank app. Paytm roped in Axis Bank, Yes Bank, SBI and HDFC Bank as its Payment Service Provider (PSP) banks to be its partners in the TPAP.
Hit On Market Share as per NPCI Website
According to data from the NPCI website, Paytm’s UPI market share fell to nine percent in March, marking its lowest level in the past four years. NPCI oversees UPI operations.
In February, it declined to 11 percent from the prior month following the RBI’s severe restrictions on its affiliate company, PPBL.
What Paytm said About the Migration Process?
“Following NPCI’s approval on March 14, 2024, to onboard OCL as a Third- Party Application Provider (TPAP), Paytm has expedited the integration with Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank. All four banks are now operational on the TPAP, streamlining the process for Paytm to shift user accounts to these PSP banks,” the company said in a statement to stock exchanges.
How to Migrate?
Paytm will prompt the users with a pop-up notification seeking their approval for the migration. Once the users agree, they will be provided with options to choose their preferred bank from the four available partners. Each bank will offer a unique UPI handle namely ‘@ptsbi’, ‘@pthdfc’, ‘@ptaxis’, or ‘@ptyes.’
What does the Migration Process mean for Paytm Users?
The integration with these four major banks streamlines the process for Paytm to transition user accounts from Paytm Payments Bank to the partner banks. Users can expect a seamless experience with uninterrupted access to UPI payments and AutoPay mandates, leveraging the secure infrastructure of the new banking partners. As part of this transition, users’ current UPI IDs with ‘@paytm’ will be changed to new IDs with ‘@ptsbi’, ‘@pthdfc’, ‘@ptaxis’, or ‘@ptyes, ensuring continuity in UPI transactions for both users and merchants. Users with ‘@paytm’ handles will be the first to undergo migration.
