Paytm Barred From Onboarding New Online Merchants; The Company Says There Is ‘no Material Effect’ On The Business
November 28, 2022: One97 Communications (OCL), which owns the Paytm brand, proposed in December 2020 to transfer the payment aggregator services business carried by it to Paytm Payment Services (PPSL) to comply with RBI’s Payment Aggregator (PA) guidelines but the banking regulator.
His application was rejected. According to a regulatory filing, the Reserve Bank has banned online merchants from onboarding Paytm payment services.
The company said it will not have any material impact on its business. One97 Communications (OCL), which owns the Paytm brand, proposed in December 2020 to transfer the payment aggregator services business carried by it to Paytm Payment Services (PPSL) to comply with RBI’s Payment Aggregator (PA) guidelines but the banking regulator.
His application was rejected. The company resubmitted the required documents in September 2021. The company said that PPSL has now received a letter from the RBI in response to the application for authorization to provide PA services for online merchants.
According to the letter, PPSL is “required to obtain necessary approval from the company for previous downward investment in PPSL, to comply with FDI guidelines” and “not to onboard new online traders”.
Company can resubmit PA application within 120 calendar days. The company will not onboard new online merchants until approvals are pending.
A PA is an entity that facilitates e-commerce sites and merchants to accept various payment instruments from customers to meet their payment obligations without requiring merchants to build a separate payment integration system of their own.
As per RBI’s PAs guidelines, a single entity cannot continue to provide e-commerce marketplace with payment aggregator services and such payment aggregator services should be separated from the e-commerce marketplace business.
Paytm further said that there are no material observations from the RBI and the move has not affected its business and revenue as the central bank’s communication is applicable only on onboarding of new online merchants.
“We can continue to onboard new offline merchants and offer them payment services including all-in-one QR, soundbox, card machines etc.
Similarly, PPSL may continue to do business with existing online merchants, for whom services will remain unaffected. We hope to get necessary approvals in time and resubmit the application,” Paytm said.
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