Paytm Ordered To Re-Apply For Payment Aggregator Licence Within 120 Days; Previous Application Was Rejected?
The digital payments major Paytm’s lending and financial services arm Paytm Payments Services (PPSL) had applied for authorisation as a payment aggregator services provider for online merchants to the Reserve Bank of India.
However, in a recent filing to the domestic exchanges, the digital financial services provider announced that it was refused to be granted a payment aggregator license from the Paytm Payments Services.
Besides Paytm, the online payment services provider Mobikwik is the only notable payments gateway whose application for a payment aggregator license was rejected by RBI.
In fact, Paytm is the only large payment gateway company to have received a rejection from the central bank.
Companies like Razorpay, CCAvenues, Pine Labs and Cashfree have received an approval for the aggregator license from the regulator bank, while the applications of BillDesk and PayU are awaiting response from the bank.
While reports suggest that Paytm’s wholly-owned subsidiary Paytm Payments Services’ application has been rejected by the RBI, the wallet major has stated that the regulatory bank has asked PPSL to reapply for the payment aggregator application within 120 calendar days or four months’ time.
In a filing to the bourses, PPSL informed that RBI has asked the company to ‘seek necessary approval for past downward investment from the Company to PPSL for compliance with the FDI guidelines.
During this period, RBI has prohibited PPSL to onboard any new merchants to their platform.
Paytm’s filing read, “This has no material impact on our business and revenues, since the communication from RBI is applicable only to onboarding of new online merchants.”
The company added that it can continue onboarding new offline merchants and offer them payment services including All-in-One QR, Soundbox, and Card Machines, among others.
Similarly, the payments company will be allowed to continue doing business with its existing online merchants. For these companies, the services will remain unaffected.