Paytm Allowed to Onboard New Merchants Now; Gets Payment Aggregator License

The Reserve Bank of India (RBI) has given approval to Paytm Payments Services Limited (PPSL) to operate as an online payment aggregator. PPSL is a wholly-owned subsidiary of One 97 Communications Ltd.

The approval of the licence also lifts RBI’s restrictions which it imposed on PPSL in November 2022. The restrictions barred PPSL on onboarding new merchants due to multiple non-compliance issues. Now that the restrictions are removed, PPSL can start onboarding new merchants to its payment platform.

RBI had instructed Paytm to reapply for the licence with proper compliance under the foreign direct investment (FDI) rules.

These approval cover only the operations carried out through the online aggregator platform, without covering any other payment activity. The approval also comes with some regulatory conditions set by the RBI. As per RBI, PPSL must conduct a comprehensive system and cybersecurity audit. These audits should be conducted by entities specified by the central bank.

PPSL is also required to submit the audit report within six months to the RBI, or PPSL may lose its in-principal approval.

The approval comes just a couple of days after Paytm reported its first ever quarterly net profit of ₹123 crore in Q1FY26. This was a significant turnaround from the loss of ₹839 it incurred in the same quarter last year. Its revenue from operations also jumped 28% year-on-year to ₹1,918 crore.

With the payment aggregator licence approval and the lift on merchant onboarding ban, Paytm, through its subsidiary PPSL, can now grow its merchant network. If executed rightly, this can contribute positively to its digital payments business.

At 10:55 a.m. August, 13^th the stock price of the company is up by 4.04% at Rs 1,165.3. Nifty 50 index is up by 0.39% at this time.

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Source: RBI