RBI asks NPCl to consider Paytm's request for TPAP: What is it & how will it benefit customers?

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Last Updated27/02/2024

The Reserve Bank of India (RBI) has asked the National Payment Council of India (NPCI) to examine the request of One97 Communications’ (OCL)
OCL owns Paytm, and requested to become a Third-Party Application Provider (TPAP) for continued Unified Payments Interface operation of the Paytm application.

A TPAP approval is mandatory to provide UPI-based payment transactions to customers.
Currently, all UPI transactions on the Paytm app are being routed through Paytm Payments Bank (PPBL), an associate company of OCL, which is registered as TPAP.
As the RBI has asked the PPBL to shut its operations by March 15, 2024, there will be no TPAP registration for the Paytm app to be able to provide UPI payment services.

A Third-Party Application Provider is an entity that provides the UPI compliant app(s) to the end-user customers to facilitate UPI-based payment transactions.
These applications could be mobile wallets, merchant apps, or any other platform that utilises UPI for payments.
NPCI, the umbrella organisation for operating retail payments and settlement systems in India, owns and operates the UPI platform.
TPAPs leverage the UPI infrastructure provided by NPCI and work with payment service providers (PSPs) and banks to facilitate transactions.
They are responsible for ensuring that their applications adhere to security standards and compliance guidelines set by NPCI.

For Paytm, TPAP approval from NPCI is a must to continue to provide UPI-based payment transactions facility to customers.
OCL will not be allowed to add new users until all the existing users are migrated satisfactorily to a new handle, the regulator said.
As per NPCI regulations, large TPAPs have to mandatorily participate in UPI through a multibank model only.

Currently, there are 22 NPCI-approved 3rd party Unified Payments Interface (UPI) apps that can be used to send and receive money from other UPI users by using UPI IDs.
They include Amazon Pay, Google Pay, Groww, Jupiter Money, Mobikwik, Phonepe, Samsung Pay, TataNeu and Whatsapp.