Paytm says its QR codes will continue to function as usual, merchants don't need to look for alternatives

Paytm, a fintech firm that specializes in digital payments, on Tuesday said its QR codes will continue to function as usual, allowing merchants to accept payments beyond February 29, 2024. Payment devices such as Paytm Soundbox and card machines will also continue to remain operational as always, it added.

The Reserve Bank of India (RBI) on January 31 directed Paytm Payments Bank Ltd (PPBL) to stop accepting deposits or top-ups in any customer accounts, wallets, FASTTags, and other instruments after February 29. This sparked fears about whether Paytm's QR codes will also be affected. 

Today, Paytm said that some merchants have repayment arrangements set up through the PPBL bank account, as the settlements were being processed there. "Now we need to migrate their settlement account to another bank of their choice so that settlements continue to be received and repayments can proceed uninterrupted," it said. 

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This migration of Paytm merchants' settlement account to a bank of their choice will happen at the back end, a process similar to mobile number portability, it said, adding that the process will not impact the merchants and customers on the front end. 

Paytm also said that it is in talks with some leading banks and will partner with one of them to ensure that there is no disruption to merchants. "Over the past two years, Paytm has collaborated with multiple banking partners for a host of services. For services like Paytm QR, where Paytm Payments Bank, acts as a back-end bank, these services will seamlessly transition to other partner bank/s. This means that there will be continued service available to its merchant partners," the spokesperson said.  

Following an update by RBI during the Monetary Policy Committee regarding Paytm Payments Bank, the Deputy Governor emphasised that the opportunity for partnership with PPBL will be a prerogative of banks, paving way for ongoing and possible collaboration between Paytm Payments Bank and other banking institutions. 

On Monday, RBI Governor Shaktikanta Das ruled out any review of the central bank's action against PPBL, saying that its decisions are well thought out. RBI, he said, is not against any fintech but its prime objective is to protect the interest of customers and depositors. "We have taken action against PPBL after due consideration and soon FAQs (Frequently Asked Questions) will be issued for the benefit of its customers," Das said. 

Ruling out any relaxations, Das on Monday said, "at the moment, let me say very clearly, there is no review of this (PPBL) decision. If you are expecting a review of the decision, let me very clearly say there is (going to be) no review of the decision". 

"FAQs which we are proposing to issue are targeting the inconvenience or issues faced by the depositors and customers wallet users, FASTag holders. Whatever is in the customers' interest that we are dealing in FAQs. Regarding the review of the decision, there is nothing on the table," he said.