Indian Fintech Paytm Wins A Major Regulatory Battle Days After Key Investor Exit

Indian fintech elephantine Paytm has received long-awaited support from nan country’s cardinal slope to run arsenic a costs services supplier for online merchants — conscionable days aft 1 of its Chinese investors sold its full liking — marking a cardinal regulatory breakthrough aft months of setbacks and scrutiny.

On Tuesday, nan Reserve Bank of India granted “in-principle” support to Paytm’s Payment Services portion to run arsenic an online costs aggregator, genitor institution One97 Communications said successful its filing (PDF) to Indian banal exchanges. The support comes much than 2 years aft nan Noida-based fintech was initially denied nan licence successful November 2022 due to non-compliance pinch India’s rules connected receiving investments from countries that stock a onshore border.

Without nan license, Paytm was barred from onboarding caller online merchants. At nan time, nan institution said nan regularisation had “no worldly impact” connected its business aliases revenues. However, astatine its yearly wide gathering past September, One97 Communications laminitis and CEO Vijay Shekhar Sharma stated his intention to reapply for nan costs aggregator license.

The support besides comes complete a twelvemonth aft nan RBI banned Paytm Payments Bank from accepting caller deposits and enabling in installments transactions. Paytm weathered that effect by quickly shifting gears and partnering pinch Axis, HDFC, State Bank of India, and Yes Bank to make them service arsenic costs strategy providers for its consumers and merchants progressive successful online transactions and autopay mandates.

With nan caller license, Paytm tin operate arsenic a work provider for online merchants, enabling them to judge a scope of costs methods, including cards, nett banking, and nan Indian government-backed Unified Payments Interface (UPI). The support besides lifts nan online merchant onboarding restrictions imposed by nan cardinal slope successful 2022.

The support comes conscionable a week aft China’s Ant Group exited Paytm by trading its remaining 5.8% nonstop liking successful One97 Communications for $454 million done artifact deals. This follows an earlier exit successful 2023, erstwhile Ant Financial sold a 10.3% liking — worthy $628 million — to Sharma successful a no-cash deal.

Paytm is required to undertake a “system audit,” including a cybersecurity review, and taxable its study to nan Reserve Bank of India wrong six months. If it fails to do so, nan support will lapse, per nan RBI missive enclosed pinch nan company’s banal speech filing. The licence is besides constricted to online costs services and does not widen beyond that scope.

The latest improvement will thief Paytm power astir of its worth chain, from its offline sound boxes to nan online costs gateway, and trim its reliance connected different slope partners, fintech investor Osborne Saldanha told TechCrunch.

Paytm is presently nan third most-used UPI payments platform, down Walmart-owned PhonePe and Google Pay. The fintech accounted for 6.9% of nan full 18.4 cardinal UPI transactions successful June and 5.6% of nan transaction value, per nan National Payments Corporation of India (NPCI). In total, Paytm processed 1.27 cardinal UPI transactions worthy ₹1.34 trillion (approximately $15 billion).

Although Paytm trails PhonePe and Google Pay successful nan UPI marketplace — pinch nan duo handling complete 82% of each UPI transactions successful June — nan institution offers a wide suite of businesses and services to pull some consumers and merchants. These see offline merchant costs solutions pinch integrated hardware, software, and work layers, arsenic good arsenic a increasing in installments and lending business.

Paytm reported (PDF) nett income of ₹1.23 cardinal (approximately $14 million) for nan first 4th of its financial twelvemonth 2026, ending successful June — a turnaround from a nonaccomplishment during nan aforesaid play past year. The results hit expectations, arsenic analysts had projected a nonaccomplishment of ₹1.27 cardinal (approximately $14.5 million). Revenue roseate 28% year-over-year to $224 million, while nan company’s publication separator improved to 60%, up from 50% a twelvemonth ago.

In summation to its caller financial growth, Paytm’s shares person risen 13.25% year-to-date successful 2025, signaling that nan institution is opening to regain marketplace assurance aft much than a twelvemonth of regulatory setbacks. The banal closed astatine ₹1,118.50 (approximately $13) connected Wednesday, conscionable earlier nan regulatory support was announced.