Paytm approved by NPCI for User bank migration

Paytm approved by NPCI for User bank migration

Context: Paytm has received approval from NPCI to let users link their accounts with other banks for UPI transactions, enhancing flexibility in digital payments.
Paytm has integrated with four major banks—State Bank of India, Yes Bank, HDFC Bank, and Axis Bank—and is transitioning its users to these new banks following an RBI directive. The directive requires Paytm Payments Bank to cease basic banking services by March 15, 2024, prompting Paytm to migrate its systems to other banks to continue its payments business.

About Paytm:
1. Founding and Background:
- Founded in 2010 by Vijay Shekhar Sharma.
- Indian multinational financial technology company.
2. Digital Payment Services:
- Offers mobile recharges, utility bill payments, and QR code-based transactions.
3. Launch of Paytm Wallet:
- Introduced Paytm Wallet, a mobile-based payment solution, in 2014.
4. Achievements:
- Crossed over 100 million downloads, becoming India\'s first payment app to achieve this milestone in 2017.
5. Paytm Payments Bank:
- Launched Paytm Payments Bank in 2017 to offer banking services.
- Faced regulatory issues leading to operational changes.
6. IPO Listing:
- Listed on Indian stock exchanges in 2021 through a historic IPO.
- Raised $2.5 billion, marking India\'s largest-ever IPO.

NPCI Approval:
1. NPCI Approval for Migration:
- On March 14, 2024, NPCI allowed Paytm to transition to a Third-Party Application Provider (TPAP) model with State Bank of India, Yes Bank, HDFC Bank, and Axis Bank.
2. Backend Integration Completion:
- The backend integration with the four banks is now finalized.
3. Customer Migration Initiation:
- Paytm received clearance from NPCI on April 16, 2024, to begin migrating its users.
- All @Paytm handle users will now undergo migration to these partnered banks.

What is TRAP for Seamless UPI Payments:
• The four partner banks are now operational under the TPAP model, facilitating Paytm\'s transition of user accounts to them for uninterrupted and secure UPI payments.
• TPAP (Third-Party Application Provider) is a model that allows third-party application providers like Paytm to integrate with multiple banks for UPI payment services.
• This model enables Paytm to onboard users and process UPI transactions through partner banks\' infrastructure, ensuring reliability and compliance without relying solely on one bank or its own payments bank.
• TPAP is an API model introduced by NPCI for UPI transactions, marking a significant development in the UPI payments landscape.
• Paytm UPI users can create new Virtual Payment Addresses (VPAs) with partner PSP banks.
• Users with \'@paytm\' handles are being transitioned to these banks, providing them with new UPI IDs in the format of @ptsbi, @pthdfc, @ptaxis, and @ptyes corresponding to State Bank of India, HDFC Bank, Axis Bank, and Yes Bank respectively.

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