The Reserve Bank of India (RBI) has Rejected Paytm application to provide payment aggregator service for online merchants.
RBI said Paytm Payments Services is required to re-submit its PA application within 120 calendar days.
It is to be noted that One97 Communications, which owns the Paytm, had proposed to transfer the payment aggregator services business undertaken by it to Paytm Payments Services in December 2020.
During this process, the company will not onboard new online merchants.
This makes Paytm the only large payment gateway player to receive a rejection from the regulator. Incumbents like Razorpay, Pine Labs, Cashfree and CCAvenues have received an in-principle nod from the regulator, while BillDesk and PayU are awaiting a response.
According to RBI’s PAs guidelines, a single entity cannot continue to provide an e-commerce marketplace along with payment aggregator services and such payment aggregator services must be separated from the e-commerce marketplace business.