Paytm is in focus as the Paytm Payments Services has received approval from the Reserve Bank of India (RBI) to operate as a Payment Aggregator. The company informed the exchanges that the RBI has granted it a Certificate of Authorization on November 26. Paytm Payments Services is a wholly-owned subsidiary of One 97 Communications.
In an exchange filing, the parent company, One 97 Communication, stated that the “Reserve Bank of India has granted Certificate of Authorization (“COA”) to Paytm Payments Services Limited (PPSL), a wholly-owned subsidiary of One 97 Communications, to operate as a Payment Aggregator under the Payment and Settlement Systems Act, 2007.”
Paytm can now collect and settle payments for merchants
With this approval, Paytm Payments Services can now onboard merchants and enable online transactions for them. Earlier, Paytm was restricted from onboarding new merchants until it received the in-principle approval and could only continue servicing its existing clientele.
Paytm clears FDI hurdle
This is a major development for the company, which first applied for the permit in March 2020 but saw the application stuck in regulatory delays. In 2022, the RBI returned the application due to non-compliance with foreign direct investment (FDI) norms. However, in August 2024, the company resolved the issue after securing the necessary clearances from the Union Finance Ministry, paving the way for the PA licence.
Full PA status gives Paytm parity with fintech peers
The Certificate of Authorization is a standard certification for most large fintech companies. While Paytm held only the PA-Online licence, several of its rivals—including Cashfree, Pine Labs, PayU, and Razorpay—have already obtained authorisations to operate as online, offline, and cross-border payment providers.
Paytm expects gains to show in consolidated financials
The clearance comes a little over three months after the RBI granted the in-principle approval on August 12. The company told the exchanges that the authorisation will support business growth and will be reflected in the consolidated financials of One 97 Communications.
The disclosure also clarified that there is no suspension, withdrawal, or cancellation of the authorisation. It further noted that there is no monetary or operational impact related to the licence, and no corrective action is required.