Paytm Payments Services Secures RBI Greenlight to Resume Online Payment Aggregation

 

 

 

Paytm Payments Services Limited (PPSL), a wholly-owned subsidiary of One 97 Communications Limited (OCL), has received in-principle authorisation from the Reserve Bank of India (RBI) to operate as an Online Payment Aggregator under the Payment and Settlement Systems Act, 2007.

This marks a major milestone for Paytm in its journey to strengthen its presence in India’s rapidly growing digital payments ecosystem. The RBI approval follows PPSL’s re-application in September 2024, after its initial proposal was returned in November 2022.

 

The Payment Aggregator (PA) licence will enable Paytm Payments Services Limited (PPSL) to onboard new online merchants, increase digital transaction volumes and revenue, reduce regulatory uncertainties, and strengthen its competitive edge against leading fintech players such as Razorpay, Cashfree, and PayU. According to RBI’s guidelines, the authorisation applies exclusively to PA operations. Transactions outside the scope of Payment Aggregator–Payment Gateway (PA-PG) norms—such as merchant payouts—cannot be processed via escrow accounts meant for PA activities.

As part of its approval conditions, PPSL must conduct a comprehensive system and cybersecurity audit through a CERT-In empanelled auditor, a CISA-registered professional, or a DISA-certified expert. It must ensure compliance with the RBI’s Master Direction on Cyber Resilience and Digital Payment Security Controls (July 2024) and the Data Storage Circular (April 2018), and submit the audit report within six months, failing which the approval will lapse. Additionally, PPSL is required to follow the RBI’s July 2022 guidelines on shareholding changes, acquisition of control, and transfer of payment system operations for non-bank entities.

In August 2024, the Ministry of Finance approved Paytm’s proposal to increase investment in its payment services arm, paving the way for the fresh PA licence application. The earlier rejection in 2022 was linked to FDI compliance issues under Press Note 3.

With this approval, Paytm aims to reinforce its leadership in UPI payments, merchant services, and digital commerce solutions, ensuring secure and compliant financial transactions for millions of businesses across India.