**Paytm Receives RBI Approval to Operate as Online Payment Aggregator**
The Reserve Bank of India (RBI) has granted Paytm Payments Services Ltd (PPSL) preliminary approval to function as an online payment aggregator, as announced by its parent company, One 97 Communications Ltd, in a stock exchange filing on Tuesday. This approval allows Paytm to begin onboarding new customers, marking a significant step in expanding its digital payments operations.
The authorization specifically pertains to online payment aggregator activities as outlined in RBI guidelines, effectively lifting previous restrictions on merchant onboarding that were imposed on PPSL in a letter dated November 25, 2022. The filing confirmed that these restrictions have been rescinded.
PPSL is required to adhere to the Guidelines on Regulation of Payment Aggregators and Payment Gateways, which were established on March 17, 2020, and updated periodically, along with clarifications issued by the RBI on March 31, 2021.
Paytm, a wholly-owned subsidiary of One 97 Communications, had reapplied for the payment aggregator license in September 2024 and awaited approval for nine months. During this time, competitors such as PayU, MobiKwik’s Zaakpay, and PBFintech’s lending arm received their licenses.
A payment aggregator license allows fintech companies to collect and settle payments on behalf of businesses, facilitating secure and efficient digital transactions. The approval process for Paytm’s license was prolonged, particularly after the stake of Alibaba Group-backed Antfin in Paytm was reduced to below 10%. This reduction was necessary to comply with the 2020 foreign direct investment regulations, which require government approval for investments from countries sharing a land border with India.
In August 2023, Antfin transferred a 44% stake in Paytm to CEO Vijay Shekhar Sharma through his overseas entity, Resilient Asset Management. The final regulatory approval for the payment aggregator license was granted following Antfin’s exit from Paytm, concluding a decade-long investment. Recently, it was reported that Antfin plans to sell its remaining 5.84% stake in One 97 Communications for ₹3,803 crore through a block deal, characterizing the transaction as a “clean-up” trade.
In January 2024, One 97 Communications’ Paytm Payments Bank faced regulatory scrutiny when the RBI ordered a halt to the onboarding of new customers due to compliance concerns with banking regulations.
**FAQ**
**What does the RBI approval mean for Paytm?**
The RBI approval allows Paytm Payments Services Ltd to operate as an online payment aggregator, enabling the company to onboard new customers and expand its digital payment services.
