Paytm started its journey in 2010 and became one of the leading platforms for digital money transfer within a few years. The founders of the company started their operation to ease digital payment methods using QR code payments. However, the Reserve Bank of India mentioned that Paytm Payment Bank cannot offer its core services to the customers. […]
Paytm started its journey in 2010 and became one of the leading platforms for digital money transfer within a few years. The founders of the company started their operation to ease digital payment methods using QR code payments. However, the Reserve Bank of India mentioned that Paytm Payment Bank cannot offer its core services to the customers. The RBI has implemented section 35A of BR or the Banking Regulation Act on Paytm. So, Paytm users are curious to know Will Paytm bounce back? Readers can read the content below to get relevant details.
Paytm and its journey
Vijay Shekhar Sharma founded Paytm with One97 Communications. In this world of digitization, Paytm implemented advanced technology known as paytm money. It became one of the most popular digital payment options within just a few years. Customers started using this app for recharge, bill payment, flight booking, booking of movie tickets, etc. Many top-ranked foreign and domestic companies like SoftBank and Berkshire Hathaway made huge investments in Paytm.
Why did RBI Banned Paytm?
RBI noticed that Paytm had violated many regulations, and RBI has mentioned that the online payment platform does not follow the rules of paytm payments bank rbi. The company did not maintain the compliance rules and violated the directions for payment banks. It has been observed that Paytm opened many accounts without proper documentation, and this can lead to illegal activities like money laundering.
Restrictions Imposed on Paytm by RBI
RBI mainly asked Paytm to stay away from any payment like paytm fastag or paytm railway and has imposed the following restrictions.
- The bank cannot accept new investments from customers and investors
- Paytm is not allowed to do any credit transaction
- Customers cannot make any recharge or paytm flight ticket booking using the app
- No fund transfer is permitted.
- Customers also cannot enjoy the services like bookmyshow paytm, etc.
As soon as the news went viral, the stock value of Paytm reduced suddenly by 36%, and the company experienced a huge loss of approximately $2 billion. This has affected nearly 8 million Fastag users, 30 million Paytm bank users and 300 million wallets. Previously, RBI put restrictions on Paytm in accepting new users in 2018 and 2022.
Will Paytm bounce back?
Millions of Paytm users are still waiting to get a positive answer to the above question. Well, there is good news from NPCI. NPCI, or National Payments Corporation of India, has agreed that One97 Communications can operate as Third Party Application Provider. Paytm will now be allowed to offer its UPI or Unified Payment Interface service to its users. It has also been declared that India’s top four banks, Axis Bank, State Bank of India, Yes Bank and HDFC, will work as PSP or Paytm System Provider according to the regulations of rbi paytm payments bank. PSP Banks help UPI applications communicate accurately with other banking channels.
RBI asked NPCI to examine Paytm’s request to become the third-party application provider. NPCI has also instructed paytm payments bank limited to migrate all prevailing handles. It has also asked Paytm to direct all fresh payment system providers immediately.
Top Paytm Services
Paytm holds nearly 330 million users who use the Wallet-based transactions of the Paytm app. These customers suffered a lot after restrictions made by rbi on paytm. This Indian Multinational Finance company offers separate services for regular customers and businesses.
Business houses can use facilities like consumer payment, business payments, POS billing software, advertising on Paytm, etc. Regular customers can use the app for varied purposes. Individuals can use it for Bill payments and recharge, online payments, sending money, flight ticket payments, etc.
Milestones and controversies- Paytm journey
| Year | Milestones |
| 2000 | Vijay Shekhar Sharma founded One97 Communication |
| 2010 | Vijay Shekhar Sharma launched Paytm. Initial Investment USD 2 million |
| 2014 | Paytm Wallet launched. Indian Railways and Uber started using the Wallet |
| 2015 | Started payment options for education fees, electricity payment, Gas bill payment. |
| 2015 | Alibaba Group took 40% stock in Paytm. It also get supports from Ratan Tata. |
| 2016 | Launched movie, amusement part and flight ticket booking system |
| 2017 | SoftBank made huge investment and company’s valuation reached to $10 billion |
| 2017 | First app to cross 10 crore downloads |
| 2019 | Launched first Paytm Credit Card with Ctibank |
| 2018 | One Investigative News Agency in India alleged that Paytm shared personal information of Paytm users violating paytm rbi rules. |
| 2020 | Google Play unlisted Paytm App for a short period of time |
| January 2024 | RBI ordered Paytm to stop bulk transactions |
Conclusion
It has been noticed that paytm crisis has led loads of Paytm users to suffer a lot. Since 2010, Paytm has become one of the top platforms for online payment, and the company has suffered huge losses due to the implementation of restrictions by RBI. However, as per a report on 14th March 2024, Paytm has managed to get a Third-Party License from NPCI.