Current Affairs

The NPCI has approved PayTM for user bank migration

The NPCI has approved PayTM for user bank migration

The National Payments Corporation of India (NPCI) has given Paytm permission to move its users' Unified Payments Interface (UPI)-based payment services to other banks.The company has began the process of moving its consumers to these new Payment System Provider (PSP) banks after completing its integration with four major banks: State Bank of India, Yes Bank, HDFC Bank, and Axis Bank.But in order to maintain the viability of its payments business, Paytm Payments Bank was forced to move its systems to other banks after the Reserve Bank of India (RBI) ordered it to stop offering fundamental banking services by March 15, 2024

NPCI Approval and Integration

The four aforementioned banks and Paytm were permitted to transition into a Third-Party Application Provider (TPAP) model by NPCI on March 14, 2024.Now that the backend integration is finished, the customer migration process can start. On April 16, 2024, Paytm gained approval from the NPCI to begin the user transfer process. Users using @paytm handles will now all be moved to these banks..

What is TPAP for Seamless UPI Payments

·        The four banks are currently able to operate on the TPAP, which makes it easier for Paytm to transfer customer accounts to them. This guarantees that Paytm will be able to offer safe and continuous UPI payments via the Paytm app to both customers and merchants.

·        The TPAP concept enables numerous banks to be integrated with a third-party application provider, like Paytm, for UPI payment services. With this arrangement, the third-party application provider does not need to depend on a single bank or its own payments bank to enroll users and facilitate UPI transactions through the infrastructure of partner banks.

·        TPAP is a big change in the UPI payments scene because it lets third-party app developers, like Paytm, integrate with several banks, giving users a more dependable, safe, and easy way to make payments while also helping the UPI ecosystem grow and complying with regulations.

New Virtual Payment Addresses (VPAs)

• The business has begun moving "@paytm" handle users to these banks, guaranteeing a seamless transfer to the new UPI IDs.

• Paytm UPI customers can now generate new VPAs with partner PSP banks.

• The new VPAs will have the matching partner bank's @ptsbi, @pthdfc, @ptaxis, and @ptyes format.

About Paytm:

Vijay Shekhar Sharma launched the Indian multinational financial technology startup Paytm in 2010.

• Founded in 2014, Paytm Wallet is a mobile-based payment solution.

• In 2017, it became the first payment app in India to reach over 100 million downloads.

• In 2017, it introduced Paytm Payments Bank, which later encountered regulatory issues.

• In 2021, it goes public on Indian stock exchanges, raising $2.5 billion in the country's largest-ever initial public offering (IPO).

The NPCI has approved PayTM for user bank migration