Crisis-hit Paytm set to operate as third-party app for UPI: Reports

One 97 Communications, the parent company of payment application - Paytm is focusing on the third-party payment app (TPAP) route to ensure that the Unified Payments Interface (UPI) remains open for its users.

According to the sources, the talks on the same have already started with the National Payments Corporation of India (NPCI). NPCI runs the UPI ecosystem in the country. Currently, those using Paytm to make UPI payments have virtual payment addresses (VPAs) ending in @paytm, which will soon be changed to the specific bank. The users might see that changing to some other bank from March 1.

Paytm plans to work with three or more banks to begin offering new VPAs to its users as early as next month. HDFC Bank, Axis Bank and Yes Bank are in contention for the consumer-facing UPI payments business of Paytm, just like they are looking to support the nodal accounts of its merchants.

On January 31, the Reserve Bank of India sent Paytm Payments Bank an order to stop all the basic payment services via technology railroads and other platforms, including UPI, starting on February 29.

Reports also claim that Paytm will soon be included among services like PhonePe, Google Pay, Amazon Pay, and so forth. 22 TPAPs are now using UPI. Through the TPAP method, banks like Axis Bank, HDFC Bank, and ICICI Bank help a number of fintech.

Banks and fintech typically utilize addresses that are a mix of both their brands. It is also anticipated that banks that will take on the settlements of Paytm Payments Bank may ask for new KYCs.