Unified Payments Interface As a Third-Party Application Provider:
The National Payments Corporation of India has recently granted approval to Paytm-owner One97 Communications Ltd to participate in Unified Payments Interface (UPI) as a Third-Party Application Provider (TPAP) under the multi-bank model.
- Axis Bank, HDFC Bank, State Bank of India, and YES Bank will act as Payment System Provider (PSP) banks to Paytm.
- Previously, Paytm operated through its own payments bank licence. However, due to regulatory non-compliance, RBI imposed several restrictions on Paytm Payments Bank.
- TPAPs are entities facilitating UPI payments by connecting customers and merchants through applications or platforms.
- They serve as intermediaries, ensuring seamless transactions and play a vital role in the UPI ecosystem, handling millions of transactions daily.
- NPCI, formed as a collaboration between the RBI and Indian Banks’ Association (IBA) under the Payment and Settlement Systems Act, 2007 operates as a not-for-profit entity to enhance India’s payment and settlement infrastructure.
- It aims to provide both physical and electronic payment solutions to the banking sector, leveraging technology to drive operational efficiency and expand payment system accessibility.
