Paytm gets RBI's in-principle nod for online payment aggregator licence
The authorisation, which applies only to online payment aggregator operations, as defined under RBI guidelines, paves the way for the company to expand its digital payments business.
'Merchant onboarding restrictions placed on Paytm Payments Services Limited (PPSL) vide letter … dated November 25, 2022, stand withdrawn from the date of this letter,' the filing stated.
'PPSL must comply with the Guidelines on Regulation of Payment Aggregators and Payment Gateways dated March 17, 2020 (as updated from time to time) and the clarifications issued by RBI on March 31, 2021.'
Paytm, the wholly-owned subsidiary of One 97 Communications, had reapplied for the payment aggregator licence in September 2024 and was awaiting approval for nine months, even as its peers including PayU, MobiKwik's Zaakpay, and PBFintech's lending arm got their licences.
A payment aggregator licence enables a fintech firm to collect and settle payments on behalf of businesses, making it easier and more secure for them to accept digital transactions.
The award of the licence was delayed even as Chinese firm Alibaba Group-backed Antfin's stake in Paytm was reduced to below 10%, a move that was aimed at resolving a key hurdle under the 2020 foreign direct investment norms, commonly referred to as Press Note 3. The norm restricts investments from countries sharing a land border with India without prior government approval.
In August 2023, Antfin had transferred a 44% stake in Paytm to chief executive officer Vijay Shekhar Sharma, routed through his overseas entity Resilient Asset Management. The final regulatory clearance for a payment aggregator licence, however, came after the exit of the Alibaba Group firm from Paytm, ending a decade-long investment. Earlier this month, Mint had reported that Antfin will sell its entire 5.84% stake in One97 Communications for ₹ 3,803 crore through a block deal, describing the sale as a 'clean-up' trade.
In a case of regulatory scrutiny, in January 2024, One 97 Communications' Paytm Payments Bank was ordered by the RBI to halt onboarding of new customers, citing concerns over its compliance with banking regulations.
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