The National Payments Corporation of India (NPCI) has given the go-ahead to One97 Communications Limited (OCL) which is the parent company of Paytm, to initiate the migration of users to new Payment System Provider (PSP) Bank handles. This significant development is followed by the NPCI’s approval on March 14th, 2024 allowing OCL to function as a Third Party Application Provider (TRAP) on the Multi Payment Service Provider API Model.
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Streamlining Operations with Major Banking Partners
To streamline operations and facilitate a smooth transition, Paytm has expedited integration with 4 major banking partners: Axis Bank, HDFC Bank, State Bank of India (SBI) and YES Bank. These banks will now act as PSPs for Paytm, enhancing the efficiency and reliability of its services.
Transitioning Users to Ensure Seamless UPI Payments
After getting NPCI permission in hand, Paytm has commenced the process of transitioning users’ “@paytm” handles to these PSP banks. This move ensures uninterrupted Unified Payments Interface (UPI) payments for both users and merchants, underscoring Paytm’s commitment to fostering the growth of the UPI ecosystem across India.
OCL’s Compliance with Regulatory Directives
The recent development comes in compliance with regulatory directives, including advice from the Reserve Bank of India (RBI) to NPCI to consider OCL’s request to become a TRAP for continued UPI operations
Understanding TPAPs and their Role in the UPI Ecosystem
A third-party application provider (TRAP) plays a crucial role in the UPI ecosystem by participating through a PSP Bank. TRAPs facilitate the onboarding and registration of customers on PSPs linking their bank accounts to UPI identification. Right now, in India, there are currently 24 operational TRAPs including major players like Amazon Pay, PhonePe and Google Pay.
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Collaborative Efforts to Support Fintech Innovation
This case will be an example of how growing fintech businesses are collaborating with PSPs to promote innovation in the financial service sector. Banks like Axis Bank, HDFC Bank, SBI and ICICI Bank are at the center of fintech companies’ UPI-based infrastructure. Their collaboration has resulted in providing customers with the most excellent user experience.
