Paytm migrates users to new UPI IDs: Know key changes
What's the story
One97 Communications Limited (OCL), the parent company of Paytm, has started transitioning its users to partner payment service provider (PSP) banks. These include Axis Bank, HDFC Bank, SBI, and Yes Bank.
This move comes after Paytm Payments Bank Limited (PPBL), an associate company of OCL, faced severe sanctions from the Reserve Bank of India (RBI) for violating KYC norms.
The sanctions have made PPBL's role as a PSP unsustainable.
New role
Paytm received approval to operate as TPAP last month
Following approval from the National Payments Corporation of India (NPCI) on March 14, 2024, OCL has been permitted to function as a Third-Party Application Provider (TPAP) under a multi-bank model.
This endorsement allows Paytm to continue offering UPI services through its partner banks.
The company has quickly integrated with these banks, all of which are now operational on the TPAP.
User experience
Paytm guarantees smooth transition for users
Paytm assures its users of a seamless transition with uninterrupted access to UPI payments and AutoPay mandates.
Once a user is transitioned to another partner PSP bank, their existing UPI ID with '@paytm' will be replaced by a new one with one of the four handles: @ptsbi, @pthdfc, @ptaxis, and @ptyes.
Users will receive a pop-up notification asking for their consent to use Paytm with their new UPI ID.
Market impact
Paytm's UPI market share drops amid RBI sanctions
The RBI's sanctions on PPBL have led to a significant drop in Paytm's UPI market share.
In March 2024, it fell to 9%, marking its lowest point in four years.
This was a further decline from February 2024 when it had slipped to 11% due to the same constraints.
The limitations imposed by the RBI have thus significantly impacted Paytm's standing in the UPI market.