Indian fintech large Paytm has acquired long-awaited approval from the nation’s central financial institution to function as a cost providers supplier for on-line retailers — simply days after certainly one of its Chinese language traders offered its whole stake — marking a key regulatory breakthrough after months of setbacks and scrutiny.
On Tuesday, the Reserve Financial institution of India (RBI) granted “in-principle” approval to Paytm’s Cost Companies unit to function as a web-based cost aggregator, dad or mum firm One97 Communications stated in its submitting (PDF) to Indian inventory exchanges. The approval comes greater than two years after the Noida-based fintech was initially denied the license in November 2022 as a consequence of noncompliance with India’s guidelines on receiving investments from nations that share a land border.
With out the license, Paytm was barred from onboarding new on-line retailers. On the time, the corporate stated the restriction had “no materials affect” on its enterprise or revenues. Nevertheless, at its annual common assembly final September, One97 Communications founder and CEO Vijay Shekhar Sharma said his intention to reapply for the cost aggregator license.
The approval additionally comes over a 12 months after the RBI banned Paytm Funds Financial institution from accepting recent deposits and enabling credit score transactions. Paytm weathered that affect by shortly shifting gears and partnering with Axis, HDFC, State Financial institution of India, and Sure Financial institution to make them function cost system suppliers for its shoppers and retailers concerned in on-line transactions and autopay mandates.
With the brand new license, Paytm can function as a service supplier for on-line retailers, enabling them to simply accept a variety of cost strategies, together with playing cards, web banking, and the Indian government-backed Unified Funds Interface (UPI). The approval additionally lifts the net service provider onboarding restrictions imposed by the central financial institution in 2022.
The approval comes only a week after China’s Ant Group exited Paytm by promoting its remaining 5.8% direct stake in One97 Communications for $454 million by way of block offers. This follows an earlier exit in 2023, when Ant Monetary offered a ten.3% stake — value $628 million — to Sharma in a no-cash deal.
Paytm is required to undertake a “system audit,” together with a cybersecurity evaluate, and submit its report back to the Reserve Financial institution of India inside six months. If it fails to take action, the approval will lapse, per the RBI letter enclosed with the corporate’s inventory trade submitting. The license can also be restricted to on-line cost providers and doesn’t lengthen past that scope.
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The most recent growth will assist Paytm management most of its worth chain, from its offline sound bins to the net cost gateway, and scale back its reliance on different financial institution companions, fintech investor Osborne Saldanha informed TechCrunch.
Paytm is presently the third most-used UPI funds platform, behind Walmart-owned PhonePe and Google Pay. The fintech accounted for six.9% of the entire 18.4 billion UPI transactions in June and 5.6% of the transaction worth, per the Nationwide Funds Company of India (NPCI). In complete, Paytm processed 1.27 billion UPI transactions value ₹1.34 trillion (roughly $15 billion).
Though Paytm trails PhonePe and Google Pay within the UPI market — with the duo dealing with over 82% of all UPI transactions in June — the corporate presents a broad suite of companies and providers to draw each shoppers and retailers. These embody offline service provider cost options with built-in {hardware}, software program, and repair layers, in addition to a rising credit score and lending enterprise.
Paytm reported (PDF) web earnings of ₹1.23 billion (roughly $14 million) for the primary quarter of its monetary 12 months 2026, ending in June — a turnaround from a loss throughout the identical interval final 12 months. The outcomes beat expectations, as analysts had projected a lack of ₹1.27 billion (roughly $14.5 million). Income rose 28% year-over-year to $224 million, whereas the corporate’s contribution margin improved to 60%, up from 50% a 12 months in the past.
Along with its latest monetary progress, Paytm’s shares have risen 13.25% year-to-date in 2025, signaling that the corporate is starting to regain market confidence after greater than a 12 months of regulatory setbacks. The inventory closed at ₹1,118.50 (roughly $13) on Wednesday, simply earlier than the regulatory approval was introduced.
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