Paytm Gets In-Principle Payment Aggregator Licence From RBI

The Reserve Bank of India (RBI) has granted in-principle authorisation to fintech major Paytm’s subsidiary, Paytm Payments Services Limited (PPSL), to operate as a payment aggregator (PA).

“We would like to inform you that Reserve Bank of India (“RBI”) has granted ‘in-principle’ authorisation to PPSL… to operate as an online payment aggregator under the Payment and Settlement Systems Act, 2007,” the company said in an exchange filing. 

In its approval order, the RBI advised PPSL to undertake a system audit, including cyber security and IT audits, by roping in relevant authorities.

“The system audit report should be submitted to RBI within six months from the date of this letter, failing which the in-principle authorisation granted hereby shall lapse automatically and grant of final authorisation not considered thereafter,” read the RBI order.

This comes a year after Paytm received approval from the Centre to invest in PPSL. At the time, the company said that it would re-apply for a PA licence.

The licence will also allow the company to pool the funds received from customers and transfer them to merchants via designated escrow accounts.

Effectively, this will enable Paytm to onboard new online merchants, offer a wide range of services and create an alternate stream of revenue. The licence comes more than a year after the RBI, in a sweeping crackdown, barred Paytm Payments Bank from operating, leaving the fintech major in a regulatory mess. 

The latest development comes just weeks after Paytm swung to profitability in Q1 FY26 on the back of AI-led operating leverage, disciplined cost structure and growing revenues. 

The fintech major reported a consolidated net profit of INR 122.5 Cr in the quarter under review as against a net loss of INR 840.1 Cr in Q1 FY25. Revenue from operations jumped 28% to INR 1,918 Cr in Q1 FY26 from INR 1,502 Cr in the year-ago period.