A day after National Payments Corporation of India (NPCI) gave One97 Communications Limited approval to be a third-party app on UPI platform, Yes Bank and Axis Bank went live on Paytm app early March 15, allowing users to create new handles.
The development comes on the day RBI's deadline for Paytm Payments Bank Limited to stop all banking operations runs out. PPBL was acting as the backend bank powering Paytm's UPI payments until now.
New users trying to register for UPI on Paytm app will get new handles backed by these banks instead of Paytm Payments Bank Limited, which has been almost rendered inactive by the Reserve Bank of India's crippling restrictions.
Yes Bank has gone live with a closed user group of users with @ptyes handle and Axis Bank has gone with @ptaxis handle.
Yes Bank has the additional role of migrating existing @paytm handles as of now. Paytm has around 90 million UPI users who are using @paytm handles. Other banks will also join Yes Bank in taking over these handles gradually.
The country's largest lender SBI and the largest private sector lender HDFC Bank will likely go live in a couple of days. SBI will go with @ptsbi and HDFC will go with @pthdfc handles.
These four banks will act as the payment service provider (PSP) banks, which connect a third party app to connect with the banking system.
While RBI has asked PPBL to stop all banking services, it made an exception to PSP services as the new banks will need a couple of months to migrate these users.
Paytm has around 11 percent market share in UPI and process more than three billion beneficiary transactions and around 1.6 billion outgoing transactions. Without a seamless migration from PPBL to other banks is required for the world's largest real-time payment system UPI to function seamlessly.
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