Paytm snaps ties with Juspay, joins Razorpay, Cashfree, PhonePe in industry-wide shift to direct processing

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Paytm has become the latest fintech to ditch third-party payment orchestration platforms, including Juspay, as it shifts to direct transaction processing. The move follows similar exits by Razorpay, PhonePe, and Cashfree Payments, signalling a broader industry shift away from intermediaries.

In a notification sent to merchants seen by Moneycontrol, Paytm announced that from April 1, 2025, it will only facilitate transactions routed directly through Paytm Payments Services Limited (PPSL), advising businesses to shift before the deadline to avoid service disruptions.

"Thank you for choosing PPSL as your preferred payments partner. It is our constant endeavour to provide our merchants with leading payment solutions. To uphold this commitment and provide a more streamlined experience, we have further enhanced our payment gateway experiences. As part of this advancement, effective Apri 1, 2025, PPSL will be facilitating transactions which are routed directly to PPSL and will no longer facilitate transactions routed via Juspay," the email read.

Most retailers work with multiple PG firms and Juspay helps them integrate with multiple firms, from card tokenisation to the checkout page user experience and user interface. Juspay's payment routing engine determines which PG a merchant should use for a particular transaction to ensure better success rates.

PG firms, which are looking to expand offerings amid shrinking commissions, feel that the payment routing engine of Juspay gives the firm an undue influence on deciding which PG the merchants should use.

On March 24, Juspay announced that it has open-sourced its payments routing engine called Hyperswitch as part of its broader open-source initiative. However, PGs allege that Juspay's routing engine is not transparent enough.

Interestingly, Juspay also has a payment aggregator license from the regulator and the PG firms fear that the payment processing firm could try to poach its customers. Juspay is also in discussions with investors for a $150 million round, which could strengthen the company's overall payments business, threatening its rivals.

Payment orchestration platforms like Juspay act as intermediaries between businesses and multiple payment gateways. They simplify the management of payment flows by offering features like multi-payment gateway routing, transaction optimisation and failover mechanisms. These platforms are especially useful for businesses operating at scale, as they streamline payment operations and reduce dependencies on a single PG.