Wednesday 24th July 2024

RBI Allowed PPSL To Continue Its Online Payment Aggregation Amid Approval Process

One97 Communications, the parent company of PPSL, reported in a regulatory filing on March 26 that the Reserve Bank of India has allowed Paytm Payment Services Ltd (PPSL) an extended time for resubmission of its application form for a payment aggregator (PA) licence.

According to the exchange filing, the central bank has also permitted PPSL to continue operating as a payment aggregator while it awaits government permission on previous investments received from One97 Communications.

One97 Communications advised the stock exchanges that according to RBI’s letter, PPSL will have 15 days after receiving GoI (Government of India) approval to file the application seeking authorization for PPSL to function as an online PA. But if the GoI made any unfavourable decisions, they must be immediately reported to the RBI.

It also stated that PPSL could continue operation with its online payment aggregation service for existing partners during this period without adding any new merchants.

Moreover, the company claimed that any latest improvements or changes would have “no material impact” on the business and revenues of PPSL by adding the cause that the RBI notification is only applicable to “onboarding of new online merchants” and hence the company can continue to provide payment services to all the existing online merchants as usual.

One97 Communications further clarified that for offline businesses, it could continue to onboard new merchants and provide them with payment services such as all-in-one QR, soundbox, card readers, etc.

Remarkably, as per the RBI’s new set of guidelines released in March 2020, the regulator mandated that all PAs must be authorised by it. In order to do this, the regulator advised all non-bank businesses that provide PA services to submit applications for seeking authorization by June 30, 2021, under the Payment and Settlement Systems Act, 2007 (PSS Act). Later, this deadline was extended to September 30, 2021.

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Paytm Launch UPI Lite On Its Platform

As every month billions of transactions happen over UPI every day, failure of the link is very common. To address this problem, the National Payments Corporation of India (NPCI)  introduced UPI Lite last year in September. UPI Lite is a lighter and more efficient version of UPI for smaller transactions. Currently, Paytm has applied the UPI Lite to its own payment platform.

UPI Lite is the feature enabled by NPCI only for the self-developed BHIM App. The development of this feature was intended to allow users to quickly carry out small transactions of up to Rs 200 with a single touch.

For the first time, a third-party app, Paytm, gain the support for the UPI Lite to introduce it on its platform. The company claims that UPI Lite will enable faster real-time transactions. Even during high transaction hours, UPI Lite will “never fail.”

It is similar to Paytm wallet payments, but whenever users make a payment, it does not ask for a pin. Users can do multiple small-value UPI transactions of up to Rs 200 at a time. Additionally, they can also back the UPI balance to the same bank account anytime without any charge.

With UPI Lite, only a single money transfer entry is performed in the user’s bank account, which declutters bank statements. Users will receive a daily SMS containing the history of all UPI Lite transactions made during the previous day from the bank.

Currently, 9 banks support Paytm UPI Lite, including the State Bank of India, Canara Bank, Central Bank of India, Indian Bank, HDFC Bank, Kotak Mahindra Bank, Union Bank of India,  Utkarsh Small Finance Bank, and Punjab National Bank.

Paytm is offering its users a Rs 100 cashback for activating UPI Lite for the first time and adding Rs 1,000 as a balance in the wallet.

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