Highlights
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Paytm announces partnership with Axis Bank for merchant payment settlements.
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Transition to Axis Bank’s escrow account aimed at maintaining transaction efficiency.
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RBI confirms continued operation of Paytm QR, Soundbox, and card machine services.
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Partnership expected to streamline payment framework and adhere to regulatory standards.
In a recent development, Paytm has announced a partnership with Axis Bank in the backdrop of RBI serving a notice for the closure of Paytm Payments Bank.
This collaboration aims to streamline the settlement process for merchant payments, marking a significant move by Paytm to optimize its financial transaction services.
“The shift of the nodal account to Axis Bank (by opening an Escrow Account) will ensure seamless merchant settlements as before. We strive to continue to empower Indians, contributing significantly to the country’s financial inclusion journey,” the spokesperson added.
Paytm’s Founder and CEO, Vijay Shekhar Sharma, took to X to reassure its vast user base.
“Paytm QR, Soundbox, and EDC (Card Machine) will operate as usual, even after March 15,” he said. He also urged the users not to be swayed by rumours and to continue supporting Digital India.
“After March 15, 2024, you (PPBL customers) will not be able to deposit money into your account with Paytm Payments Bank. No credits or deposits other than interest, cashbacks, sweep-ins from partner banks or refunds are allowed to be credited,” the FAQs said.
It further said: “It is suggested that you make alternative arrangements with another bank before March 15, 2024 to avoid inconvenience.”.
“However, no further funding or top-ups will be allowed in the FASTags issued by Paytm Payments Bank after March 15, 2024,” it said, and it advised the customers to procure a new FASTag issued by another bank before March 15, 2024 to avoid any inconvenience.
Strategic Shift in Operations
As part of this new alliance, Paytm is transitioning its nodal account operations to Axis Bank, utilising an escrow account.
This move is intended to maintain the efficiency of merchant settlements, ensuring that transactions continue without disruption.
The parent company of Paytm, One97 Communications, assures that Paytm QR, Soundbox, and card machine services will remain operational for all merchant partners.
This continuity of service has been confirmed by the Reserve Bank of India (RBI), alleviating concerns about potential service interruptions post-March 15.
“We are committed to providing seamless service to our merchant partners, with a focus on compliance and regulatory guidelines. We assure our users that the Paytm app, and our pioneering devices like Paytm QR, Soundbox card machine will continue to work as always. The shift of the nodal account to Axis Bank (by opening an Escrow Account) will ensure seamless merchant settlements as before. We strive to continue to empower Indians, contributing significantly to the country’s financial inclusion journey,” said the Paytm spokesperson.
Merchants using Paytm’s services linked to non-Paytm Payments Bank accounts can expect their operations to proceed smoothly.
This transition reflects Paytm’s commitment to regulatory compliance while aiming to minimize impact on merchant services.
Paytm and Axis Bank: A Collaborative Effort
This partnership builds on Paytm’s existing relationship with Axis Bank, aiming for a smooth transition that benefits the merchant ecosystem within Paytm.
The collaboration is expected to facilitate a more efficient framework for handling merchant payments.
Paytm’s initiative to partner with Axis Bank for merchant payment settlements aligns with its adherence to regulatory standards.
This strategic move is part of Paytm’s broader efforts to ensure uninterrupted services for its merchants, emphasizing the company’s role in supporting India’s digital payment landscape.
FAQs
What does the Paytm and Axis Bank partnership mean for merchants?
This partnership signifies a strategic shift in Paytm’s operations to Axis Bank, specifically through an escrow account, to ensure efficient and uninterrupted settlement of merchant payments.
Will Paytm’s services like QR, Soundbox, and card machines be affected?
No, Paytm assures that these services will remain operational for all merchant partners, with the RBI also confirming their uninterrupted functionality beyond March 15.
Why is Paytm shifting its nodal account to Axis Bank?
The shift to Axis Bank is part of Paytm’s commitment to provide seamless service to its merchants by maintaining the efficiency of payment settlements, especially in light of regulatory compliance.
Can merchants using non-Paytm Payments Bank accounts expect any disruptions?
Merchants linked to non-Paytm Payments Bank accounts will not face any disruptions and can continue their operations smoothly, thanks to this strategic partnership.
How will this partnership affect the overall merchant payment ecosystem?
The collaboration between Paytm and Axis Bank is expected to facilitate a more efficient payment handling framework, benefitting the merchant ecosystem and supporting India’s digital payment landscape.