Axis, HDFC, SBI and YES Bank will be the payment service provider banks and YES Bank will be acting as the merchant acquiring bank for both existing and new UPI merchants.
“YES Bank shall also be acting as merchant acquiring bank for existing and new UPI merchants for OCL. “@Paytm” handle shall be redirected to YES Bank. This will enable existing users and merchants to continue to do UPI transactions and AutoPay mandates in a seamless and uninterrupted manner,” NPCI said in a statement.
Paytm has also been advised by NPCI to complete migration for all existing handles and mandates to new PSP banks at the earliest.
The TPAP approval removes the last remaining regulatory challenge for ensuring a smooth transition of customers and merchants, Jefferies said.
“Given it may lose access to banking license, Paytm’s business model will now become similar to pure payment service providers like PhonePe, Google Pay, Pine Labs, etc. It is likely to push for deeper engagement with banks and regulated entities,” the brokerage said, adding that in case of no incremental regulatory clampdown, there could be multiple scenarios for the business depending on user/merchant retention.
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“Importantly, the path to normalization for the lending business (which has been partly suspended) will provide clarity on revenue/EBITDA trajectory. We see +ve & -ve risks arising from user/merchant retention, revenue traction and cost controls. We remain watchful for clarity on attrition numbers and the path to normalization for lending business,” it said.Morgan Stanley said it continues to await an update on potential impact to Paytm’s businesses during February and updated commercials for Paytm as Paytm Payment Bank’s business moves to other banks.
Also read | NHAI advises Paytm FASTag users to switch to other FASTags by March 15 or face penalties
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