One97 Communications, the parent company of Paytm Payment Services Ltd (PPSL), stated that the Reserve Bank of India (RBI) has granted an extension to Paytm to resubmit its application for a payment aggregator license.
Paytm will be able to continue its payment aggregation operations while awaiting approval from the government concerning its past investments made by One97 Communications.
As per orders from RBI, when it receives approval, Paytm must apply for a payment aggregator license within the next 15 days.
However, the letter also stated that if the Indian government makes an unfavorable decision, the central bank must be notified right away.
This is because the RBI mandates that all payment aggregators must be authorized. As per orders from the RBI, issued in March 2020, non-bank entities providing payment aggregation services were required to apply for authorization by June 30, 2021, but the deadline was later extended to September 30, 2021.
“This continues to have no material impact on our business and revenues, since the communication from RBI is applicable only to on-boarding of new online merchants and we can continue to provide payment services to our existing online merchants, ” stated Paytm in its filing with the stock exchanges on Sunday.
“Furthermore, for offline business, One97 Communications Ltd. can continue to on-board new merchants and offer them payment services, including All-in-One QR, Soundbox, Card Machines, etc, ” the filing read.
According to recent filings with the Securities and Exchange Board of India, the Vijay Shekhar Sharma-led firm witnessed a rise in the deployment of subscription-based products like sound boxes and point-of-sale (PoS) machines. As of February, Paytm has 6.4 million merchants who subscribe to the company’s products and services.
“With our subscription as a service model, the strong adoption of devices drives subscription revenues and higher payment volumes, while increasing the funnel for our merchant loan distribution,” it said in the filing.
Edited by Akanksha Sarma