Paytm Payment Services Gets RBI Nod to Restart Merchant Onboarding

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The Reserve Bank of India has authorised Paytm Payments Services Ltd (PPSL), a Paytm subsidiary, to operate as an online payment aggregator. This approval allows the company to start onboarding new merchants again. They have not been able to do this since 2022.

Conditions Attached

The approval isn’t a blank cheque. PPSL must first:

  1. Complete a thorough audit of its systems and cybersecurity, carried out by a certified auditor from an RBI-approved list.
  2. Follow the RBI’s rules on cyber resilience and digital payment security.
  3. Submit the audit findings within six months to keep its approval.
  4. Stick to shareholding regulations and inform the RBI if there’s any change in ownership or control.

Payments Remain Paytm’s Core Engine

Paytm’s payment services division contributes more than half of the company’s overall revenue. It’s the business unit that’s kept growth on track, especially as the company steps away from its payments bank operations and doubles down on merchant services, payment aggregation, and lending products.

Market Responds Positively

Investors responded to the news quickly. One 97 Communications, the company that owns Paytm, saw its shares reach a record high for the year. This increase suggests that the market views this as a positive change, which contributes to restoring confidence after months of regulatory challenges.

Why It Matters

  • Back in the game: The RBI’s decision ends a long pause on new merchant sign-ups, signalling trust in PPSL’s compliance efforts.
  • Refined strategy: With the payments bank now in the past, Paytm is sharpening its focus on high-growth, high-margin payment aggregation services.
  • Competitive comeback: The approval allows Paytm to go head-to-head with big rivals like PayU and PhonePe.
  • Investor confidence: The share price jump shows the market is betting on a rebound.

The Road Ahead

This isn’t just regulatory paperwork, it reopens one of Paytm’s most important revenue channels. Onboarding merchants again gives PPSL a real shot at reclaiming ground in India’s crowded digital payments space.

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