Paytm extends losses, falls 3% ahead of payments bank March 15 deadline

Shares of One97 Communications (Paytm) extended losses on March 14, falling over 3 percent ahead of the March 15 deadline for Paytm Payments Bank services. The decline comes a day after the country’s largest lender State Bank of India partnered with Paytm for its consumer UPI payments.

Paytm’s UPI was powered by Paytm Payments Bank Limited (PPBL) and since the RBI’s action on the latter on January 31, Paytm has been trying to enter into partnerships to become a third-party application provider (TPAP), like its larger competitors PhonePe and Google Pay.

The fintech is reportedly looking to migrate UPI payments to four banks and is eyeing TPAP status before the March 15 deadline. This would help Paytm settle UPI transactions once it gets the third-party app provider licence.

At 9:43 am, Paytm shares were trading at Rs 338.95 on the National Stock Exchange (NSE), down 3 percent from the previous close. The stock has plunged nearly 60 percent in the last six months.

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The fintech stock is trading 9 percent above the 52-week low of Rs 318 hit on February 16. From the January 31 closing price of Rs 761.20, the stock has fallen over 54 percent.

Moneycontrol reported that Paytm had partnered with Axis Bank, Yes Bank and HDFC Bank for TPAP partnerships earlier. The fintech is in talks with Axis, Canara, Yes and Kotak Mahindra Bank to migrate merchant accounts from payments bank. NPCI, which runs UPI payments, is working with all the banks to expedite the TPAP process by March 15.

For most large UPI players, the regulatory body National Payments Corporation of India insists that they should have at least three bank partners. The bank partners in UPI are payment service providers (PSP), which connect the TPAP to the banking network. Since OCL already had a partnership with PPBL, it did not require other bank partners.

On February 23, RBI said customers and merchants having ‘@paytm’ handles are to be migrated seamlessly from PPBL to a set of newly identified banks to avoid any disruption.

Also Read | SBI partners with Paytm as the fourth bank for its UPI business

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