Recurring payments via old Paytm UPI handles get 2-month lifeline

The extension comes after Mint reported on 14 August that scores of autopay mandates or transactions were set for disruption, as the fintech supervisory body planned to deactivate all @Paytm handles with effect from 1 September.

Paytm earlier this month wrote to its merchant partners informing them that the NPCI has extended the deadline for deactivating its UPI ID by two months.

“We would like to inform you about an important update from NPCI regarding the existing UPI mandates on the @Paytm handle. The validity for mandates in all the categories has been extended until 31 October 2025 after which they will no longer be executed,” read the email, accessed by Mint.

Around 100,000 customers across various platforms are still expected to have autopay or recurring transactions linked to the erstwhile @Paytm handles, as per the people.

Mint had earlier reported that the decision to stop transactions via the @Paytm handles was part of a series of measures taken by the Reserve Bank of India against Paytm Payments Bank last year, which included curbing the use of the @paytm UPI handle. Following this, NPCI had mandated migrating these handles to other banks. However, multiple old handles remain tied to autopay mandates, putting these planned transactions at risk once the deadline is over. Merchant Payments Alliance of India (MPAI), an association of digital merchants including Netflix, Spotify, Amazon, and Policybazaar, had been lobbying for a resolution.

“NPCI is asking all the affected merchant partners to work with Paytm to facilitate the inter-operability or migration but it doesn’t seem like Paytm is still ready at their end,” said one of the two persons cited earlier, both of whom spoke on the condition of anonymity.

Emails sent to NPCI remained unanswered.

A Paytm spokesperson said: “We have already informed our partners and users to move to new Paytm UPI handles, so there will be no disruption for them. All parties have extended their scope of work to ensure a smooth transition.”

However, merchants believe that in the absence of a clear roadmap from Paytm or NPCI until now, they have no option but to reach out to customers individually and ask them to migrate or change their UPI handles to continue the recurring transactions. This eventually does not resolve the issue and was the reason the extension was sought in the first place.

“Our ask was to figure out a more technical solution to the problem, where the handles could maybe have been migrated at the back-end. If the merchants still have to reach out to customers one-by-one and manually create new handles, the issues remain,” one of the merchants affected by the order told Mint. The earlier problem of customers being skeptical about the shift given the lack of any official communication from NPCI and Paytm also persists, he added.

Manual outreach impacts both merchants and user convenience, independent digital banking consultant Parijat Garg said.

“What is required here is some sort of a stewardship in terms of overseeing or prioritising customer convenience. One is, of course, about merchants losing their business or missing out opportunities, but it is also about customer inconvenience. Customer interest should be prioritised here,” he said, adding that this would be aided by insights into whether the inactive customers are those that signed up for something but are not using the services, or those that just don’t know how to migrate their handles.

While MPAI has been seeking a public notice from the NPCI or Paytm to reassure their merchants’ customers, NPCI may be reluctant to do so, given that this is an entity-specific issue and does not pertain to the wider industry. Also, NPCI may be hesitant to advise merchants on what route to take to migrate the handles, and prefer to let them handle the process as per their individual discretion, an industry expert said.

The merchants affected most by this transition are subscription players such as OTT (over-the-top) streaming platforms and insurance aggregators that accept mandates for recurring insurance premiums.

Paytm, on its part, has reportedly told merchants that the delay or lack of a uniform solution is due to non-preparedness of some banks at the back-end. This is likely due to the requirement for banks to route all recurring payments through NPCI Bharat Bill Pay’s Bharat Connect platform. However, given that not all banks have been onboarded to the platform is leading to some issues, one of the two people cited earlier said.

“It could be that they (regulators) would want most of these payments to migrate to Bharat Connect, which is also in some ways a regulatory indication to migrate most of these because that is the correct platform for bill payments. They might be thinking that it is better to incur a one-time pain and move all of these so that in the future the process is more seamless and automated,” Garg said.

A similar problem arose when NPCI last year asked TPAPs (third-party application providers) to route all credit card transactions through the Bharat Connect platform. During the transition, several banks such as RBL Bank and some co-branded cards–which were not onboarded onto the platform–saw failed or delayed credit card payments for a few months as the UPI platforms were unable to settle or receive payments on their behalf. Some foreign banks such as Standard Chartered are still not on the Bharat Connect platform and are unable to receive credit card payments via third-party platforms.

TPAPs are non-bank third-party payment apps such as PhonePe, BharatPe, and Google Pay that offer UPI-linked payment services.