Paytm Plans to Transfer Its POS Terminals to RBL Bank

RBL Bank Logo

Three points you will get to know in this article:

  • Paytm shifts PoS operations to RBL Bank, nods account to Axis Bank.
  • Acquires TPAP license for UPI services via multiple banks.
  • Faces share decline and investor withdrawals amidst regulatory changes.
paytm logo

Paytm's Shift in Point of Sale (PoS) Terminal Operations

Reportedly, Paytm, a leading player in fintech, is planning a shift in its point of sale (PoS) terminals, the devices used by businesses to process card payments. The plan involves transferring these terminals to RBL Bank.

Under this arrangement, One 97 Communications, Paytm’s parent company, will continue to oversee the operation and management of these terminals, maintaining the Paytm brand. However, the actual processing of transactions will now be handled by RBL Bank, according to reports by ET.

Transition of Nodal Account of Paytm Payments Bank to Axis Bank

In simpler terms, this shift is often referred to as the ‘bin’ process. What this means is that any transactions made with Visa, Mastercard, or RuPay cards at Paytm’s PoS terminals will now be processed and settled through RBL Bank’s system.

The payments will go through Axis Bank’s special accounts before being sorted out with the sellers. Paytm might set up similar accounts with other banks later on, but for now, they’re using Axis Bank. So, when you make card payments, they’ll travel from RBL Bank to Axis Bank.

Last month, Paytm made a move, transferring the nodal account of Paytm Payments Bank to Axis Bank. The big fintech player explained that they’ve smoothly transitioned by setting up an escrow account with the private bank, ensuring that merchant settlements continue without any glitches.

This shift happened because the RBI put out a directive, stopping Paytm Payments Bank from accepting deposits, credit transactions, or top-ups in any customer accounts after February 29, which got extended to March 15 later on.

Acquisition of Third-Party Application Provider (TPAP) License

Just this week, One97 Communications got their hands on the Third-Party Application Provider (TPAP) license from the National Payments Corporation of India (NPCI).

With the license in hand, the big player in fintech can now run UPI services using a multi-bank approach. Axis Bank, HDFC Bank, State Bank of India, and Yes Bank are all set to serve as payment system provider (PSP) banks for One 97 Communications.

Impact of Regulatory Changes on Paytm's Performance

Ever since the RBI made its announcement, there’s been quite a downturn for Paytm. Their shares took a nosedive, dropping nearly 60%. What’s more, last month, six mutual funds completely pulled out their investments from Paytm’s parent company, while another six significantly reduced their stakes. Altogether, they sold off over 91 lakh shares, valued at around INR 380 crore by the end of February.

In recent developments, Paytm, a prominent fintech company, is transferring its point of sale (PoS) terminals to RBL Bank, involving the processing of Visa, Mastercard, and RuPay card transactions through RBL Bank’s system. The company also moved its nodal account from Paytm Payments Bank to Axis Bank due to regulatory restrictions. Additionally, it acquired the Third-Party Application Provider (TPAP) license, enabling the operation of UPI services through multiple banks. However, these changes coincided with a significant decline in Paytm’s shares and investor backing, indicating a challenging period for the company.

Start typing and press Enter to search

Shopping Cart