Indian fintech big Paytm has acquired long-awaited approval from the nation’s central financial institution to function as a fee providers supplier for on-line retailers — simply days after considered one of its Chinese language traders offered its whole stake — marking a key regulatory breakthrough after months of setbacks and scrutiny.
On Tuesday, the Reserve Financial institution of India (RBI) granted “in-principle” approval to Paytm’s Cost Companies unit to function as a web-based fee aggregator, mother or father firm One97 Communications stated in its submitting (PDF) to Indian inventory exchanges. The approval comes greater than two years after the Noida-based fintech was initially denied the license in November 2022 as a result of noncompliance with India’s guidelines on receiving investments from international locations that share a land border.
With out the license, Paytm was barred from onboarding new on-line retailers. On the time, the corporate stated the restriction had “no materials affect” on its enterprise or revenues. Nonetheless, at its annual basic assembly final September, One97 Communications founder and CEO Vijay Shekhar Sharma said his intention to reapply for the fee aggregator license.
The approval additionally comes over a 12 months after the RBI banned Paytm Funds Financial institution from accepting recent deposits and enabling credit score transactions. Paytm weathered that affect by shortly shifting gears and partnering with Axis, HDFC, State Financial institution of India, and Sure Financial institution to make them function fee system suppliers for its customers and retailers concerned in on-line transactions and autopay mandates.
With the brand new license, Paytm can function as a service supplier for on-line retailers, enabling them to simply accept a spread of fee strategies, together with playing cards, internet banking, and the Indian government-backed Unified Funds Interface (UPI). The approval additionally lifts the net service provider onboarding restrictions imposed by the central financial institution in 2022.
The approval comes only a week after China’s Ant Group exited Paytm by promoting its remaining 5.8% direct stake in One97 Communications for $454 million by way of block offers. This follows an earlier exit in 2023, when Ant Monetary offered a ten.3% stake — value $628 million — to Sharma in a no-cash deal.
Paytm is required to undertake a “system audit,” together with a cybersecurity evaluate, and submit its report back to the Reserve Financial institution of India inside six months. If it fails to take action, the approval will lapse, per the RBI letter enclosed with the corporate’s inventory change submitting. The license can also be restricted to on-line fee providers and doesn’t prolong past that scope.
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The most recent improvement will assist Paytm management most of its worth chain, from its offline sound containers to the net fee gateway, and cut back its reliance on different financial institution companions, fintech investor Osborne Saldanha instructed TechCrunch.
Paytm is presently the third most-used UPI funds platform, behind Walmart-owned PhonePe and Google Pay. The fintech accounted for six.9% of the full 18.4 billion UPI transactions in June and 5.6% of the transaction worth, per the Nationwide Funds Company of India (NPCI). In whole, Paytm processed 1.27 billion UPI transactions value ₹1.34 trillion (roughly $15 billion).
Though Paytm trails PhonePe and Google Pay within the UPI market — with the duo dealing with over 82% of all UPI transactions in June — the corporate presents a broad suite of companies and providers to draw each customers and retailers. These embody offline service provider fee options with built-in {hardware}, software program, and repair layers, in addition to a rising credit score and lending enterprise.
Paytm reported (PDF) internet revenue of ₹1.23 billion (roughly $14 million) for the primary quarter of its monetary 12 months 2026, ending in June — a turnaround from a loss throughout the identical interval final 12 months. The outcomes beat expectations, as analysts had projected a lack of ₹1.27 billion (roughly $14.5 million). Income rose 28% year-over-year to $224 million, whereas the corporate’s contribution margin improved to 60%, up from 50% a 12 months in the past.
Along with its current monetary development, Paytm’s shares have risen 13.25% year-to-date in 2025, signaling that the corporate is starting to regain market confidence after greater than a 12 months of regulatory setbacks. The inventory closed at ₹1,118.50 (roughly $13) on Wednesday, simply earlier than the regulatory approval was introduced.
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