The National Payments Corporation of India (NPCI) has given its approval to One97 Communications Limited (OCL), the parent company of Paytm, to join the UPI services as a third-party application provider (TPAP). Paytm will collaborate with four banks, which will serve as partner banks or Payment System Providers (PSPs), to facilitate its payment services.
India’s Paytm’s witnessed a 5% increase in its shares the day following the approval granted by the National Payments Corporation of India (NPCI) to Paytm’s parent company, One97 Communications Limited (OCL), allowing it to engage in UPI services as a Third-Party Application Provider (TPAP).
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NPCI Approves YES Bank as Merchant Acquiring Bank for Paytm’s UPI Services
NPCI said in a statement, “YES Bank shall also be acting as merchant acquiring bank for existing and new UPI merchants for OCL. “@Paytm” handle shall be redirect to YES Bank. This will enable existing users and merchants to continue to do UPI transactions and AutoPay mandates in a seamless and uninterrupted manner.”
NPCI also advised Paytm to migrate all existing handles and mandates to new PSP banks at the earliest. Four banks – SBI, Axis Bank, HDFC Bank, and YES Bank will act as payment service providers to Paytm.
How has Paytm stock been performing?
Paytm’s stock has been hitting lower circuits following RBI’s ban on Paytm Payments Bank from conducting certain operations. So far this year, Paytm stock has crashed over 44 per cent hitting record low of Rs 318 per share on February 16.
Morgan Stanley on regulatory nod for Paytm
Morgan Stanley said this move is a positive development and in line with expectations. The brokerage firm said, “We will continue to await an update on the potential impact on the company’s businesses during February 2024. We await updated commercials for the company as Paytm Payments Bank’s business moves to other banks.”
Morgan Stanley share an ‘equal-weight’ call on the counter with a target price of Rs 555 which means that an upside of 57 per cent from current level is predicted by the brokerage firm.
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