One97 Communications (OCL) announced that the Reserve Bank of India (RBI) has granted an extension to its subsidiary Paytm Payments Services (PPSL) to resubmit its application for a payment aggregator (PA) licence.
In November of last year, the banking regulator ordered Paytm to reapply for the licence within 120 days and barred it from signing up new online merchants for the platform.
While Paytm can continue to service existing payment gateway customers, it cannot accept new merchants.
Furthermore, Paytm’s reapplication for a PA licence is conditional on the government’s acceptance of parent company OCL’s participation in PPSL.
OCL, in its filling, said, “As per RBI’s letter, on receipt of approval from GoI, PPSL will have fifteen days to submit the application seeking authorisation for PPSL to operate as an online PA. However, if any adverse decision is taken by the GoI, then the same shall be informed to RBI immediately.”
It added, “There are no observations in the letter other than what is mentioned above. We are hopeful of receiving the necessary approvals in a timely manner.”
Two other payment service providers, Razorpay and Cashfree, were also advised to halt new merchant onboardings due to issues with their PA licences. Last year, the RBI granted Razorpay and Cashfree in-principle clearance for their PA applications.
After BillDesk, Razorpay, and PayU, Paytm is one of the top five payment gateway providers in the country in terms of total transaction value completed. Cashfree is also on the list.
Billdesk is the largest and only gateway service that is not barred from onboarding new merchants. The RBI has also given its clearance in principle.