Paytm likely to partner with four banks for enabling UPI transactions: Report

Paytm is likely to partner with Axis Bank, HDFC Bank, State Bank of India (SBI), and Yes Bank for processing transactions via the popular unified payments interface (UPI), Reuters reported on Monday, citing sources.

The talks to onboard banking partners are on, and Paytm wants to start this process with large banks that have the technological bandwidth to handle large volumes seamlessly, one of the sources told the news agency.

"Paytm is likely to onboard Axis Bank as a banking partner first, and then rope in more banks," the second source told Reuters, adding that the NPCI will take about a month's time to check the bank's technology and related infrastructure.

Paytm is the third-largest app for UPI payments in the country, processing 1.6 billion monthly transactions, according to data available on the NPCI website. PhonePe and Google Pay are the two largest.

Paytm's users will migrate to an updated UPI handle of the partner bank. "Any business with Paytm will only happen as per RBI's regulatory orders," Prashant Kumar, chief executive officer at Yes Bank said on Monday. "If there is clarity on the risks involved and if the business makes commercial sense to us, we have the capabilities."

On January 31, the Reserve Bank of India (RBI) barred Paytm Payments Bank Ltd (PPBL) from taking any fresh deposits or credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards after February 29, 2024.

The central bank last week asked the NPCI to examine a request from Paytm to become a third party application provider and to facilitate four-to-five banks to act as service providers for it.