Paytm is reportedly planning to transition its point of sale (PoS) terminals, utilised for processing card payments at merchant establishments, to RBL Bank.
One 97 Communications, the parent company of Paytm, will retain responsibility for operating and managing these terminals under the Paytm brand
The transaction processing will now be handled by RBL Bank
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Fintech major Paytm is reportedly planning to transfer its point of sale (PoS) terminals, used for processing card payments at merchant establishments, to RBL Bank.
While One 97 Communications, the parent company of Paytm, will retain responsibility for operating and managing these terminals under the Paytm brand, the transaction processing will now be handled by RBL Bank, ET reported.
In technical terms, this process is referred to as the ‘bin’. Therefore, any Visa, Mastercard or RuPay card transactions conducted at Paytm’s PoS terminals will be settled through RBL Bank’s ‘bin.
The transactions will be forwarded to the nodal accounts of Axis Bank for eventual settlement with the merchants.
Paytm may establish nodal accounts with additional banks in the future, but currently, they are utilising Axis Bank. Therefore, card payments will be routed from the RBL Bank system to Axis Bank.
Last month, Paytm shifted the nodal account of Paytm Payments Bank to Axis Bank. The fintech major said that the new arrangement has been executed by opening an escrow account with the private bank to ensure merchant settlements continue without a hitch.
This came after the RBI issued a directive that barred Paytm Payments Bank from taking any deposits, credit transactions or top-ups in any of its customer accounts post February 29, which was later extended to March 15.
Earlier this week, One97 Communications secured the Third-Party Application Provider (TPAP) licence from the National Payments Corporation of India (NPCI).
With the licence, the fintech major can operate UPI services under a multi-bank model. Axis Bank, HDFC Bank, State Bank of India, and Yes Bank will act as payment system provider (PSP) banks to One 97 Communications.
Since the RBI announcement, Paytm shares have crashed nearly 60%. Further, six mutual funds completely divested their holdings in Paytm’s parent company last month, while another six significantly reduced their stakes. The total divestment stood at over 91 Lakh shares valued at INR 380 Cr by the end of February.
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