There is a lot of action ongoing in the financial services sector of India as the Paytm and SBI Card partnership, which began in 2020, is now shaking hands with the National Payments Corporation of India’s RuPay.
All three home-grown brands join forces to further drive the growth of inclusive, digital-first financial services in the country.
As per the Paytm executives, India stands at the cusp of next payments revolution where credit will become the mainstream payment choice.
Paytm operates as Bharat Bill Payment Operating Unit
In January 2023, Paytm has gotten approval from the Reserve Bank of India (RBI) to operate as a Bharat Bill Payment Operating Unit (BBPOU). So far, Paytm has been undertaking this activity under in-principle authorisation from RBI.
Now you will ask, what is the big deal and what happens when an entity gets to operate as a Bharat Bill Payment Operating Unit (BBPOU).
Under Bharat Bill Payment System (BBPS), a BBPOU is allowed to facilitate bill payment services of electricity, phone, DTH, water, gas insurance, loan repayments, FASTag recharge, education fees, credit card bill, and municipal taxes.
Notably, BBPS is owned by the National Payments Corporation of India.
Company officials have stated that Paytm Payments Bank Limited (PPBL) has obtained the final approval from the RBI to operate as a Bharat Bill Payment Operating Unit (BBPOU) under the Payment and Settlement Systems Act, 2007. As an entity under the Bharat Bill Payment System (BBPS), PPBL has received the final authorization to conduct bill payment and aggregation business as a BBPOU.
Alibaba Sells Stakes in Paytm, Shares Take a Nosedive
In another development, Alibaba has sold a 3.1% stake in Paytm, an India-based digital payments company, for USD 125 million through a block deal. This transaction took place on 12th January 2023, and as a result, the company’s shares dropped by as much as 8.8% to USD 6.38 during afternoon trading.
According to Reuters, the shares were last down 5.8%. Paytm, formerly known as One97 Communications, went public in 2021 with a massive USD 2.5 billion initial public offer (IPO). Since then, the stock has declined by around 75% from its IPO price due to concerns raised by investors regarding the company’s monetization plans, high valuations of technology companies, and global economic recession fears.
