Paytm shares surged by nearly 8 per cent to Rs 746.50 on the national stock exchange (NSE) at 3:15 pm today. On a year-to-date basis, the shares of the company have increased by around 15 per cent.
Earlier, on October 22, the company received the national payments corporation of India’s (NPCI) approval to onboard new unified payments interface (UPI) users. Paytm mentioned that the NPCI’s nod has come along with a caveat that the company must comply with all procedural guidelines, particularly on risk management, brand guidelines, the third-party application provider’s (TPAP) market share and customer data.
Paytm must meet all requirements highlighted in the tri-partite agreement with NPCI and payment service providers (PSP) banks. Additionally, the UPI service provider must adhere to Payments and Settlement Act 2007, Information Technology Act 2000, Digital Personal Data Protection Act 2023 and Storage of Payment System Data 2018.
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“...We would like to inform you that vide letter dated October 22, 2024, the National Payments Corporation of India (NPCI) has granted approval to the company to onboard new UPI users, with adherence to all NPCI procedural guidelines and circulars,” said Paytm in a regulatory filing on the Bombay stock exchange (BSE).
Are things changing for Paytm?
The NPCI’s nod provided relief to the fintech company. Earlier, in February this year, the struggles for the company mounted when the Reserve Bank of India (RBI) barred it from accepting deposits or top-ups in its customer account. Following a detailed audit report, RBI banned prepaid instruments, wallets and FASTags. Additionally, the regulator asked all customers and merchants of Paytm Payments Bank Ltd. (PPBL) to shift their accounts to other banks by March 15, 2024.
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However, just a day before RBI’s deadline, NCPI gave approval to the company to participate in UPI as a TPAP under the multi-bank model. It also provided that Axis Bank, HDFC Bank, State Bank of India and Yes Bank act as PSP banks to Paytm.
Recently, the company released its second quarter results for the financial year 2024-25 and reported a profit after tax (PAT) of Rs 930 crore, including an exceptional gain of Rs 1,345 crore on account of the sale of the entertainment ticketing business. Its operating revenue went up 11 per cent to Rs 1,660 on a QoQ basis.
“UPI incentives have helped on the costs front. As other factors like AI advance, we will become more cost efficient. The models and costs deployed will become phenomenally low,” said the Paytm founder Vijay Shekhar Sharma in a post-earnings call.
Also Read: https://www.outlookbusiness.com/magazine/business/issue/march-01-2024-292
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