Paytm unit asked to submit payment aggregation application

Paytm unit asked to submit payment aggregation application

The banking regulators of India asked a unit of Paytm to submit its application for approval required to provide payment aggregation services, a potentially lucrative business that the company is trying to expand into.

The Reserve Bank of India asked Paytm Payments Service Ltd. to submit its application after getting approvals from its parent to comply with foreign direct investment guidelines, the fintech company said in a disclosure to stock exchanges on Saturday.

Paytm is expanding its product offering in a bid to convince investors of its earnings potential even as losses mount, backed by SoftBank Group Corp. and Ant Group Co. Its stock has lost three quarters of its value since Paytm's initial public offering a year ago - the worst first-year decline among large IPOs around the world over the past decade.

Payment aggregators are platforms that provide different payment options to customers, such as merchants. They need a license from the Reserve Bank of India to operate.

PPSL, a 100% subsidiary of Paytm parent One 97 Communication Ltd., was asked by RBI to not onboard new online merchants as customers. Paytm has the ability to add offline merchants as users.

Since the communication from RBI is only applicable to the onboarding of new online merchants, Paytm said, there was no significant impact on our business and revenues. We are hopeful of getting the necessary approvals in a timely manner and submitting the application. The application has to be submitted in 120 days by the PPSL.

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