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.