Paytm becomes third-party application provider (TPAP): 15 Mar 2024

Paytm as TPAP on UPI:

• National Payments Corporation of India (NPCI)  allowed Paytm to function as a third party application provider (TPAP) on Unified Payments Interface (UPI).
• Four banks – SBI, Axis Bank, HDFC Bank, and YES Bank will act as payment service providers (PSPs) for Paytm.
• TPAPs are service providers that engage in UPI transactions through a PSP bank, as per NPCI, the operator of the UPI ecosystem.

Approval and Implications:

• Paytm users can continue using UPI for transactions on the app.

Operational Model:

• Paytm will operate as a TPAP under a multi-bank model.
• Existing users and merchants can seamlessly perform UPI transactions and AutoPay mandates.

Transition and Advisory:

• Paytm handle will be redirected to YES Bank for operations.
• NPCI advises Paytm to migrate all existing handles and mandates to new PSP banks promptly.

RBI Directive:

• RBI stated that no new users can be added by a third party application provider (TPAP) until existing users are migrated to new handles successfully.

Why in news?

Paytm gets NPCI nod to become third party application provider.