Paytm Gets Government Green Light for Payment Arm Investment, Plans to Reapply for License

Paytm has received approval from the Finance Ministry to invest in its payment services business, according to a Reuters report on August 28. The company didn’t share specific details about the approved investment.

“We are committed to following all regulations and maintaining high standards,” Paytm stated.

Paytm’s parent company, One 97 Communications, has faced scrutiny from the Reserve Bank of India (RBI) and the Enforcement Directorate after the RBI ordered the company to shut down its payments bank in January 2024.

Now, with this new approval, Paytm plans to reapply for a license for its financial services arm, Paytm Payment Services.

Paytm Payment Services:

While Paytm awaits a new license, Paytm Payment Services will continue offering online payment services to its existing partners.

In July 2024, Reuters reported that Paytm had secured approval for a ₹500 crore (about $6 million) investment in its payments business.

This payment services unit is a major part of Paytm’s business, contributing 25% of its revenue in the financial year ending March 2023.

Previous Issues:

Paytm’s original application for a license was rejected by the RBI almost two years ago. The RBI asked Paytm to reapply, ensuring compliance with foreign investment rules, especially those involving investments from countries that share land borders with India, such as China.