Highlights
- Paytm to migrate UPI services to Axis, HDFC, SBI, and YES Bank.
- Users required to update their UPI IDs to new bank-linked handles.
- Transition follows RBI restrictions on Paytm Payments Bank.
- Seamless migration promised with minimal disruption to services.
Paytm has secured approval from the National Payments Corporation of India (NPCI) to migrate its users to a new payment service provider (PSP).
This move comes as the company seeks to ensure uninterrupted services in the wake of regulatory actions against its associate firm, Paytm Payments Bank Limited (PPBL).
New Banks for Paytm Users
Under the new arrangement, Paytm customers will be prompted to grant permission to use a fresh UPI ID associated with one of four major banks – Axis Bank, HDFC Bank, State Bank of India, or YES Bank.
Paytm said in a statement, “Following NPCI’s approval on March 14, 2024, to onboard OCL as a Third-Party Application Provider (TPAP) on the Multi Payment Service Provider API Model, Paytm has expedited the integration with Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank. All four banks are now operational on the TPAP, streamlining the process for Paytm to shift user accounts to these PSP banks. The company has started transitioning ‘@paytm’ handles users to these banks, ensuring seamless UPI payments.”
Users will have the option to select their preferred banking partner from this list.
While the transition process may require users to update their UPI handles, the core functionality of sending and receiving money through Paytm’s platform will remain unaffected.
The company aims to make this shift as seamless as possible, ensuring minimal disruption for its vast user base.
The decision to migrate users to new banking partners comes in the aftermath of the Reserve Bank of India (RBI) imposing stringent restrictions on PPBL.
In January 2024, the central bank barred PPBL from accepting new deposits and conducting credit transactions beyond February 29, citing persistent non-compliance and material supervisory concerns.
Further compounding the issue, the RBI prohibited PPBL from onboarding new customers in March.
These regulatory actions dealt a significant blow to Paytm’s unified payments interface (UPI) market share, which fell to a four-year low of 9% in March, according to data from the NPCI.
The migration process will commence with users holding ‘@paytm’ handles, who will be prompted to switch to a new UPI ID linked to one of the four banking partners.
Paytm reassures its customers that this transition will not disrupt their ability to conduct financial transactions through the platform.
FAQs
What led to Paytm migrating its UPI services to new banks?
Paytm’s decision to migrate its UPI services to new banks comes after the Reserve Bank of India imposed several restrictions on Paytm Payments Bank, affecting its ability to accept new deposits and onboard new customers.
This strategic shift to major banks like Axis, HDFC, SBI, and YES Bank is aimed at ensuring uninterrupted UPI services for Paytm users.
How will Paytm users be affected by the migration to new UPI IDs?
Paytm users will need to update their UPI IDs to ones linked to the newly associated banks. While this transition requires a change in UPI handles, the core functionality of Paytm’s UPI services, including sending and receiving money, will not be impacted.
The company is focused on making this change as smooth as possible for its users.
What are the benefits of Paytm’s new banking partnerships for UPI transactions?
The new banking partnerships are expected to bolster the reliability and efficiency of Paytm’s UPI transactions.
By associating with well-established banks like Axis, HDFC, SBI, and YES Bank, Paytm aims to enhance service stability and maintain its competitive edge in the UPI payments market.
What steps must Paytm users take to transition to the new UPI system?
Paytm users will receive prompts to switch their UPI IDs to the new bank-linked handles.
This process involves selecting a preferred banking partner from the provided options and updating their UPI handles accordingly. Paytm intends to guide its users through every step of this transition to ensure ease and clarity.
Also Read: Paytm Partners with Axis Bank to Ensure Uninterrupted Merchant Transactions
Also Read: Top 10 Paytm UPI Alternative Apps in India for Secure Transactions