Paytm Expected To Partner With HDFC Bank As Third Merchant Acquiring Partner This Week

According to sources familiar with the matter, One97 Communications, the parent company of mobile payments firm Paytm, is likely to enlist HDFC Bank as its third partner for migrating merchants onto the Paytm platform. These merchants were initially onboarded on the Paytm app as UPI merchants by Paytm Payments Bank (PPBL), which was instructed by the Reserve Bank of India to cease all banking services from 15 March.

Axis Bank and Yes Bank have already integrated with the Paytm platform and discussions are underway with Canara Bank and Kotak Mahindra Bank, with Canara Bank expected to join next week.

Meanwhile, HDFC Bank and SBI are anticipated to go live this week as payment service provider (PSP) banks for Paytm’s third-party application provider (TPAP) business to manage the UPI consumer business. Yes Bank and Axis Bank became operational on the Paytm UPI platform on 15 March, coinciding with the deadline set by RBI for PPBL's banking operations cessation.

Yes Bank and Axis Bank have begun operations with user handles @ptyes and @ptaxis, respectively, while SBI and HDFC Bank are expected to adopt @ptsbi and @pthdfc handles, as indicated on the NPCI website.

Furthermore, Yes Bank is tasked with migrating existing @paytm handles, as it now oversees the maintenance of PPBL’s PSP banking services. This migration is crucial for the uninterrupted functioning of UPI, which is the world's largest real-time payment system.

Despite punitive measures imposed on PPBL by the RBI, merchants and UPI users associated with the platform can continue using their handles, QR codes and point-of-sale (PoS) machines post 15 March, ensuring minimal disruption to payments.

While NPCI encourages multiple banks to migrate merchant accounts to mitigate risks, the final partnerships between Paytm and banks depend on commercial negotiations. Additionally, the KYC requirements for merchants pose an additional expense and may prolong discussions.