Paytm doubles down on banking partnerships to streamline business | Business News – Business Standard
The company last year received final approval from the banking regulator to operate as the Bharat Bill Payment Operating Unit (BBPOU).
One97 Communications, the operator of the Paytm brand, is intensifying its focus on bank partnerships to transition its Bharat Bill Payment System (BBPS) from Paytm Payments Bank (Paytm PB) and focus on acquiring new merchants through these partnerships , according to people close to the development.
The company is moving quickly to finalize these partnerships after the Reserve Bank of India (RBI) last week extended the deadline for restrictions on deposit and credit transactions of Paytm PB to March 15. The banking regulator said customers and traders may need “some more time to make alternative arrangements”.
“A revised deadline is in effect and the company is looking to accelerate the completion of bank partnerships as the deadline is less than a month away. It is in talks with HDFC Bank, Axis Bank and others for these partnerships. This includes schemes for BBPS and more focus on recruiting vendors,” said an expert.
Paytm did not respond to queries from Business Standard until the time of going to press.
BBPS is an integrated bill payment system that provides customers with interoperable bill payment services through a network of agents, enabling multiple payment methods, the RBI said.
The company last year received final approval from the banking regulator to operate as the Bharat Bill Payment Operating Unit (BBPOU).
“As an entity under BBPS, our associate bank has received final authorization to conduct bill payment and aggregation activities as BBPOU,” the company said in a January 17, 2023 blog post.
Meanwhile, brokerage firm Bernstein noted a 10 percent drop in application (app) traffic in a report, saying it expected limited damage to the user/merchant base in the long term.
“Daily downloads for the app have fallen sharply (minus 50 per cent), but the number of daily active users (DAU) has only fallen by minus 11 per cent since the Paytm PB ban. Similar to the consumer app, daily downloads of the merchant app have fallen sharply (minus 40 percent), but the number of DAUs has only fallen by minus 3 percent since the Paytm PB ban, reflecting the more difficult nature of merchant relationships.” the report noted.
With a trading base of over 40 million customers, Paytm has around 600,000 live trading loans. Of these, almost 10-15 percent have a loan and repayment account with Paytm PB.
“The limited impact on app traffic for both consumers and merchants confirms our view that the disruption to gross merchandise value/merchant loan growth could indeed be a short-term phenomenon,” the report said.
Meanwhile, in a FAQ list released last week, the central bank, referring to Paytm PB’s BBPS, said customers can continue making payments from their Paytm PB account through BBPS up to the available balance.
“Since you (users) will not be able to add money to your accounts or wallets with Paytm PB after March 15, 2024, you are advised to make alternative arrangements with another bank account for BBPS before March 15, 2024. the supervisor had said.
First print: February 20, 2024 | 9:20 PM IST