The Reserve Bank of India (RBI) has granted in-principle approval to Paytm Payments Services Ltd (PPSL)—a wholly owned arm of One 97 Communications—to operate as an Online Payment Aggregator (PA). This milestone paves the way for Paytm’s comeback in merchant onboarding and digital payments. Approval comes with conditions, including a mandatory cybersecurity audit. As a result, Paytm’s parent stock surged nearly 5% to a fresh 52-week high.
Background & RBI Authorization
RBI Approval: The nod, given under the Payment and Settlement Systems Act, 2007, lifts the freeze on merchant onboarding imposed since November 2022.
Conditional Compliance: PPSL must conduct and submit a system and cybersecurity audit—performed by a CERT-In–empaneled auditor, or a CISA / DISA-certified professional—within six months or the authorization lapses automatically .
Operational Boundaries: Approval is restricted to PA functions defined in RBI guidelines; “payout transactions” to merchants via escrow are excluded.
Ownership Controls: Any future changes in shareholding or control must receive prior RBI approval.
Market Reaction
Share Price Surge: Paytm’s stock rallied approximately 4.8–5% to a 52-week high (~₹1,173.70) following the RBI mandate.
Investor Sentiment: Analysts view this as a pivotal stimulus for Paytm’s core payments segment, enhancing merchant reach and competitiveness.
Strategic Implications for Paytm & Digital Payments
Merchant Onboarding Resumes: This marks the end of regulatory inertia and reopens a critical growth channel.
Revenue Revival Opportunity: Payments accounted for over half of Paytm’s consolidated revenue last quarter.
Regulatory Tightrope: The audit requirement signals heightened compliance expectations and a roadmap for disciplined operations.
Shift in Ownership Dynamics: Ant Group’s recent exit (5.84% stake sale) removed a key regulatory hurdle tied to foreign ownership norms
