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Economy
Mahesh

25/02/24 19:53 PM IST

RBI asks NPCI to consider Paytm’s request for TPAP

In News
  • The Reserve Bank of India (RBI) has asked the National Payment Council of India (NPCI) to examine the request of One97 Communications’ (OCL), which owns Paytm, to become a Third-Party Application Provider (TPAP).
TPAP
  • A Third-Party Application Provider is an entity that provides the UPI compliant app(s) to the end-user customers to facilitate UPI-based payment transactions.
  • These applications could be mobile wallets, merchant apps, or any other platform that utilises UPI for payments.
  • NPCI, the umbrella organisation for operating retail payments and settlement systems in India, owns and operates the UPI platform.
  • TPAPs leverage the UPI infrastructure provided by NPCI and work with payment service providers (PSPs) and banks to facilitate transactions.
  • They are responsible for ensuring that their applications adhere to security standards and compliance guidelines set by NPCI.
Implications
  • For Paytm, TPAP approval from NPCI is a must to continue to provide UPI-based payment transactions facility to customers.
  • The RBI said in case NPCI grants TPAP status to OCL, ‘@paytm’ handles will have to be migrated in a seamless manner from Paytm Payments Bank to a set of newly identified banks to avoid any disruption.
  • OCL will not be allowed to add new users until all the existing users are migrated satisfactorily to a new handle.
  • For seamless migration of ‘@paytm’ handle to other banks, NPCI may facilitate certification of 4-5 banks as PSP banks with demonstrated capabilities to process high volume UPI transactions.
  • This is to minimise concentration risk in the UPI system by having multiple payment app providers.
  • As per NPCI regulations, large TPAPs have to mandatorily participate in UPI through a multibank model only.
  • Currently, there are 22 NPCI-approved 3rd party Unified Payments Interface (UPI) apps that can be used to send and receive money from other UPI users by using UPI IDs.
  • They include Amazon Pay, Google Pay, Groww, Jupiter Money, Mobikwik, Phonepe, Samsung Pay, TataNeu and Whatsapp.
Source- Indian Express

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