Paymsaid PPSLhas received a letter from RBIin response to an application for authorization to provide PA services to online merchants.
- Paytm said in the registration application that it can resubmit the PA application within 120 calendar days.
- The company will not be onboarding any new online merchants until approvals are pending.
Banking regulator RBI has paused the onboarding of online merchants
One97 Communications (OCL), owner of the Paytm brand, had proposed to transfer its payment aggregation services business to Paytm Payments Services (PPSL) in December 2020 to comply with the Payment Aggregation (PA) Guidelines of the
The company resubmitted the required documents in September 2021.
Paytm said PPSL has now received a letter from RBI in response to an application for authorization to provide PA services to online merchants.
According to the letter, PPSL is required to “seek necessary approval for the company’s previous downward investments in PPSL, to comply with FDI guidelines” and “not to hire any new online sellers.”
Paytm said in the registration application that it can resubmit the PA application within 120 calendar days.
The company will not be onboarding any new online merchants until approvals are pending.
PAs are entities that facilitate e-commerce sites and merchants to accept various payment instruments from customers to fulfill their payment obligations without merchants having to create their own payment integration system.
Under RBI’s PAs guidelines, a single entity cannot continue to provide an e-commerce marketplace along with payment aggregation services and such payment aggregation services must be separated from the e-commerce marketplace business.
Paytm further said that there were no material observations from RBI and that the move has no material impact on its business and earnings as the central bank’s communications only apply to the onboarding of new online merchants.
“We can continue to onboard new offline merchants and offer them payment services, including All-in-One QR,
SEE ALSO: More than 50% of micro-enterprises lacked mechanisms to cope with the impact of Covid, says Road to Recovery report
Elon Musk may start producing ‘alternative’ smartphones to compete with Apple, Android
India sees one-day surge of 389 new coronavirus infections, number rises to 5,30,608