Paytm to resubmit Application for Authorization of Payment Integration Services
Digital payments and financial services company Paytm has shared an update with trading companies through its 100 percent subsidiary, Paytm Payments Services.
The fintech company said it has received a letter from the Reserve Bank of India in response to a request from its subsidiary for authorization to provide payment integration services to online merchants.
A company can now reapply within 120 calendar days for payment consolidation services. Prior to that, the company will seek necessary approvals for Paytm’s previous divestment in its subsidiary, to comply with foreign direct investment guidelines.
During this process, the company will not enter new online retailers.
“We can continue to onboard new offline merchants and provide them with payment services including All-in-One QR, Soundbox, Card Machines, etc. Similarly, PPSL can continue to do business with existing online merchants, whose services will remain unaffected, it said the company in its exchange statement on Saturday.
This means that Paytm’s strong business momentum is likely to continue, with no impact on its profit target as the company can continue to work with its existing online retailers.
Additionally, Paytm’s growing device usage base and growing offline payment base will also not be affected by this development, as it can continue to tap into new merchants.
The company has clearly stated in its filing that this has no business and revenue impact as the communication from RBI applies only to the entry of new online retailers.
“We hope to get the right permits in time and then apply again,” said the applicant company.