RBI Grants In-Principle Payment Aggregator Licence to Paytm Payments Services

The Reserve Bank of India (RBI) has granted in-principle approval to Paytm Payments Services Limited (PPSL), a wholly-owned subsidiary of One 97 Communications Ltd., to operate as an online payment aggregator under the Payment and Settlement Systems Act, 2007. This approval lifts the restrictions imposed in November 2022, which had barred PPSL from onboarding new merchants due to non-compliance with foreign direct investment norms. The authorization covers only online payment aggregator operations as per RBI guidelines and does not extend to other payment activities. The development allows Paytm to resume merchant onboarding and expand its digital payment services after nearly three years of regulatory uncertainty. To maintain this approval, PPSL must complete a full system and cybersecurity audit within six months, adhere to strict data storage rules established in 2018, and comply with shareholding regulations set in 2022, or face possible revocation of the license. This regulatory clearance follows recent corporate changes, including Alibaba Group's complete exit from One 97 Communications Ltd.