‘In-principle’ authorisation: Paytm gets RBI nod to operate as online payment aggregator ending onboarding freeze; shares hit 52-week high with 5% surge

NEW DELHI: Paytm Payments Services has secured approval from the Reserve Bank of India to function as an online payment aggregator, according to a regulatory filing by its parent organisation One 97 Communications on Tuesday.This approval lifts the restrictions placed on Paytm Payments Services Limited (PPSL) regarding new merchant onboarding, which had been in effect since November 25, 2022."Paytm Payments Services Limited (PPSL), a wholly-owned subsidiary of One 97 Communications Limited (OCL or the Company), for a Payment Aggregator (PA) licence. We would like to inform you that Reserve Bank of India ("RBI") has granted 'in-principle' authorisation to PPSL vide its letter...dated August 12, 2025, to operate as an Online Payment Aggregator under the Payment and Settlement Systems Act, 2007," the filing stated, as quoted by news agency PTI.The organisation submitted its application for the permit in March 2020, but approval was delayed due to compliance matters concerning Foreign Direct Investment in the company.This authorisation arrives shortly after Chinese enterprise Alibaba group divested its complete shareholding in One97 Communications.RBI's nod directed that PPSL must comply with the Guidelines on Regulation of Payment Aggregators and Payment Gateways, including clarifications issued on March 31, 2021, to maintain its authorisation, as reported by Economic Times.The authorisation specifically encompasses PA operations as outlined in the guidelines. Any transactions beyond this scope, including merchant 'pay-outs', must be processed through separate channels, not through the designated PA escrow accounts.The central bank has also mandated PPSL to conduct a thorough System Audit, incorporating cybersecurity assessment. This audit must be performed by qualified professionals, either CERT-In empanelled auditors, Certified Information Systems Auditors (CISA), or DISA-certified experts.The assessment scope needs to include verification of compliance with the Master Direction on Cyber Resilience and Digital Payment Security Controls for non-bank Payment System Operators, alongside RBI's guidelines on 'Storage of Payment System Data'.RBI stipulateed that PPSL must submit the audit findings within six months from the letter date. Failure to meet this deadline will result in automatic cancellation of the in-principle authorisation.Furthermore, the financial firm must seek prior approval for any modifications in its shareholding or ownership structure.In the trading session following the RBI nod, One 97 Communications' shares surged 4.8% to reach a fresh 52-week peak of Rs 1,173.70 on BSE on Wednesday.The previous day, Paytm's stock had concluded marginally lower at Rs 1,119.95 on the BSE.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)