Paytm Gets PA Licences For Offline & Cross-Border Transactions

Paytm Gets PA Licences For Offline & Cross-Border Payments

SUMMARY

The fintech major said that it has received RBI’s nod to operate as a payment aggregator for offline payments as well as cross-border transactions (both inward and outward)

The regulatory approval comes days after Paytm completed an additional investment of INR 2,250 Cr in the subsidiary via a rights issue on December 12

The listed fintech major also rejigged its corporate structure by transferring its entire offline merchants payments business to PPSL earlier in November

Shortly after receiving online payment aggregator (PA) licence last month, fintech major Paytm’s payments subsidiary Paytm Payments Services Ltd (PPSL) has now bagged another three crucial PA licences from the Reserve Bank of India (RBI).

In a filing with the exchanges, the fintech major said that it has received RBI’s nod to operate as a payment aggregator for offline payments as well as cross-border transactions (both inward and outward).

“With receipt of this authorisation, PPSL now holds payment aggregator licences across all key segments, enabling it to offer end-to-end payment aggregation services across online, offline and cross-border use cases, delivering seamless payment experiences for merchants, and supporting the company’s long-term growth in domestic and international payment acceptance,” Paytm said.

This adds another feather in the cap for the Vijay Shekhar Sharma-led company this year after the central bank clamped down on its payments bank arm in 2024. With Paytm Payments Bank effectively defunct post the crackdown, Paytm had lost its in-house rails to move money and onboard merchants.

Without the PA licence, Paytm had to rely on third-party aggregators, which hurt margins, product innovation and long-term credibility with banks and regulators.

Now, Paytm’s PPSL will be able to deploy and manage its point of sale (PoS) devices and soundboxes across merchant outlets in India and abroad.

To bolster PPSL’s capabilities, Paytm completed an additional investment of INR 2,250 Cr in the subsidiary via a rights issue on December 12.

The investment was carried out to strengthen the net worth of PPSL, support working capital needs and build a leadership in the merchant payments business.

Besides the investment, the listed fintech major also rejigged its corporate structure by transferring its entire offline merchants payments business to PPSL earlier in November. The book value of the transfer for FY25 was INR 960 Cr.

Back then, the company said that the transfer was a part of an internal restructuring intended to consolidate the business within the subsidiary, “in alignment with applicable regulatory requirements and to achieve operational efficiency”.

Moving forward, Paytm also plans to leverage AI for merchant subscriptions and integrate insurance offerings within the PPSL stack.

Payments is a central piece to Paytm’s future roadmap. During the Q2 earnings call, Sharma underlined that the company would be doubling down on the payments business to sustain profitability.

In the quarter, the segment posted solid growth, with payment processing margin revenue rising 27% YoY to INR 594 Cr and subscription volumes increasing to 1.37 Cr from 1.12 Cr a year ago. Both revenue streams stem from Paytm’s merchants, who pay for using its devices and digital payment infrastructure.

Overall, Paytm’s PAT stood at INR 21 Cr in Q2 FY26, down 98% YoY from INR 930 Cr in the year-ago quarter.

The bottom line for the quarter was impacted by an INR 190 Cr impairment loss against a loan given to its real money gaming joint venture First Games. Additionally, the fintech major had also booked a one-time gain of INR 1,345 Cr pertaining to sale of Paytm Insider to Eternal in Q2 FY25.

Shares of Paytm ended today’s trading session 0.92% lower at INR 1,268.25.