Indian FinTech company Paytm said Tuesday (Aug. 12) that its payments subsidiary received “in-principle” authorization from the Reserve Bank of India (RBI) to operate as an online payment aggregator.
The firm announced the news in a post on social platform X, saying the in-principle authorization applied to Paytm Payments Services Limited (PPSL).
In a disclosure included in the post, Paytm said PPSL filed its application for a payment aggregator license in August 2024.
The authorization means PPSL can onboard new merchants, which it was barred from doing in November 2022 due to compliance issues, TechCrunch reported Tuesday.
At that time, the RBI instructed PPSL to reapply for the license, specifically citing noncompliance with foreign direct investment norms as the reason, Reuters reported in November 2022.
During the quarter ended June 30, payment services accounted for more than half of Paytm’s consolidated revenue, Reuters reported Tuesday.
The authorization also comes more than a year after the RBI ordered another Paytm business, Paytm Payments Bank, which processed transactions for Paytm, to stop conducting business. In January 2024, the RBI said an audit uncovered compliance issues related to the bank, PYMNTS reported at the time.
The central bank had in 2022 ordered Paytm Payments Bank to stop accepting new customers pending an audit.
In January 2024, the RBI said in a statement that the audit “revealed persistent noncompliances and continued material supervisory concerns in the bank, warranting further supervisory action.” The statement did not specify those concerns.
Earlier, in October 2023, the RBI fined Paytm Payments Bank for noncompliance, including know your customer regulations, saying the bank failed to identify the beneficial owners of entities using its payout services and failed to monitor payout transactions and carry out risk profiling of these entities.
In February 2024, Paytm expressed its intention to keep its digital wallet business operational by establishing new banking relationships. Paytm CEO Vijay Shekhar Sharma said at the time that it would not be difficult to forge such partnerships.
It was reported in March 2024 that Paytm’s regulatory troubles appeared to have pushed Indian consumers to payments operations owned by Walmart and Google. Data released at the time showed that the value of Paytm payments made using India’s Unified Payments Interface (UPI) had fallen 14% over a one-month period.
In July, it was reported that Paytm received government approval to invest $6 million in PPSL.