Paytm Makes Big Move: Partners with Axis Bank for Smooth Soundbox & Card Machines Continued Service Despite Bank Shift After March 15
Paytm has moved its nodal account from Paytm Payments Bank to Axis Bank, by opening an Escrow Account. This move is aimed at ensuring smooth and uninterrupted merchant settlements, as per the regulatory guidelines. Paytm's customers and merchants can continue to use its app and devices, without any hassle or inconvenience. Paytm is also working to resolve the issues related to its Payments Bank, and restore its full operations soon.
Don't Worry, Your Paytm QR & Card Payments Still Work After March 15th
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Paytm shifts nodal account to Axis Bank, assures seamless service to merchants
Paytm, India's leading digital payments platform, has announced that it has moved its nodal account from Paytm Payments Bank to Axis Bank, by opening an Escrow Account. This move is aimed at ensuring smooth and uninterrupted merchant settlements, as per the regulatory guidelines.
What is a nodal account and why is it important?
A nodal account is a dedicated account that is used to collect and disburse payments for merchant transactions. It acts as an intermediary between the payer and the payee, ensuring that the funds are securely and timely transferred.
A nodal account is required by the Reserve Bank of India (RBI) for all entities that provide payment services in India. It helps in safeguarding the interests of the customers and the merchants, as well as preventing money laundering and fraud.
Why did Paytm shift its nodal account to Axis Bank?
Paytm had been using its own Payments Bank as its nodal account provider since its launch in 2017. However, on 31 January 2024, the RBI imposed certain restrictions on Paytm Payments Bank, limiting its ability to onboard new customers and issue debit cards. The RBI also asked Paytm to stop using its Payments Bank as its nodal account by 29 February 2024.
To comply with the RBI's directives, Paytm decided to shift its nodal account to Axis Bank, one of the leading private sector banks in India. Paytm already had a long-standing partnership with Axis Bank, as its wholly owned subsidiary, Paytm Payment Services (PPSL), had been using Axis Bank's services since its inception.
Paytm said that this arrangement would seamlessly replace the nodal account that it was using with its Payments Bank, and would not affect its merchant settlements in any way. Paytm also said that it was in discussions with other banks to evaluate a second partner for nodal/escrow services, as a backup option.
How will this affect Paytm's customers and merchants?
Paytm assured its customers and merchants that the shift of the nodal account to Axis Bank would not impact their experience or convenience in any manner. Paytm said that its app and its innovative devices, such as Paytm QR, Soundbox, and Card Machine, would continue to work as usual, even beyond 15 March 2024.
Paytm also said that it was committed to providing seamless service to its merchant partners, with focus on compliance and regulatory guidelines. Paytm said that it was working closely with the RBI and other authorities to resolve the issues related to its Payments Bank, and hoped to resume its full operations soon.
About Paytm and One 97 Communications
Paytm is India's payment super app, offering consumers and merchants comprehensive payment services, such as mobile wallets, UPI, cards, banking, lending, insurance, wealth management, and e-commerce. Paytm has over 450 million registered users and 20 million merchant partners across India.
Paytm is operated by One 97 Communications, a digital financial services firm that reported a consolidated net loss of Rs 221.70 crore in Q3 FY24, as compared to a net loss of Rs 392.10 crore in Q3 FY23. The company's revenue from operations jumped 38.23% to Rs 2,850.5 crore in the quarter ended 31 December 2023, from Rs 2,062.2 crore in the same period last year. The company's share price surged 5% to close at Rs 341.50 on Friday, 16 February 2024.
Conclusion
Paytm's shift of its nodal account to Axis Bank is a strategic move to ensure smooth and uninterrupted merchant settlements, as per the regulatory guidelines. Paytm's customers and merchants can continue to enjoy the benefits of its app and devices, without any hassle or inconvenience. Paytm is also working to resolve the issues related to its Payments Bank, and restore its full operations soon.
Disclaimer
This blog post is for informational purposes only and does not constitute any financial or legal advice. The views and opinions expressed in this blog post are those of the author and do not necessarily reflect the official policy or position of Paytm, One 97 Communications, Axis Bank, or any other entity mentioned in this blog post. The readers are advised to do their own research and due diligence before making any decisions based on the information provided in this blog post.
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