Merchants with PPBL settlement accounts won't face disruption: Paytm
Paytm also clarified that QR codes will continue to function as usual. Payment devices such as Paytm Soundbox and card machines will also continue to remain operational.
Paytm has reassured merchants with repayment arrangements through Paytm Payments Bank Ltd (PPBL) that they won't face disruption post February 29 as it is in talks with leading banks for migration.
The fintech said in a statement that it would migrate the settlement accounts of merchants whose settlements were being processed at PPBL to a bank of their choosing. It also added that the migration will take place on the backend and it will not affect the merchants and customers.
Paytm also clarified that QR codes will continue to function as usual. Payment devices such as Paytm Soundbox and card machines will also continue to remain operational.
“Over the past two years, Paytm has collaborated with multiple banking partners for a host of services. For services like Paytm QR, where Paytm Payments Bank, acts as a back-end bank, these services will seamlessly transition to other partner bank/s. This means that there will be continued service available to its merchant partners,” the company said in a statement.
Paytm is in talks with YES Bank, Axis Bank, Canara Bank, ICICI Bank, HDFC Bank, and SBI for being the PSP (payment service provider) bank for issuing new VPAs (virtual payment addresses) for PPBL's customers, as per reports.
These PSP banks serve as intermediaries, linking third-party application providers such as Google Pay, PhonePe, or Paytm to the UPI system. Previously, PPBL was the exclusive PSP bank for Paytm.
"What other banks will do is a business decision; they have got to carry out due diligence as per their Board-approved policies, and I am sure that they will carry out that," Deputy Governor Swaminathan J had said regarding shifting merchants to different banks from PPBL during a press meet last week.
PPBL has been prohibited by the central bank from accepting deposits or top-ups in any customer accounts, prepaid instruments, wallets, and FASTags, among other restrictions, after February 29.
The RBI had also ruled out any review of the sanctions imposed on the payments bank.
Edited by Kanishk Singh