New Delhi (11/02): Paytm is reportedly considering the third-party payment app (TPAP) route in a bid to ensure uninterrupted access to the Unified Payments Interface (UPI) for its users. The move is likely to bring potential relief for its customers. According to an ET report, initial discussions on this strategic initiative have already begun with the National Payments Corporation of India (NPCI), the regulatory body overseeing the UPI ecosystem in the country. 
Presently, Paytm users conducting UPI payments are identified by virtual payment addresses (VPAs) ending in “@paytm.” However, a significant change is on the horizon as, starting March 1, these addresses may undergo a transition to those associated with other banks. Paytm aims to collaborate with three or more banks to issue new VPAs to its customers, and this process is expected to commence in the coming month.
The banks under consideration for this collaboration include HDFC Bank, Axis Bank, and Yes Bank, with the goal of supporting both consumer-facing UPI payments and the nodal accounts of Paytm’s merchants, ET reported. This strategic move follows the recent directive from the Reserve Bank of India, issued on January 31, instructing Paytm Payments Bank to halt all basic payment services, including UPI transactions, from February 29.
For users engaged in merchant payments, banks may require a fresh round of know-your-customer (KYC) verification. However, sources suggest that consumers utilizing Paytm for UPI services can continue seamlessly with a backend change in virtual payment addresses (VPAs).
As Paytm Payments Bank ceases its payment services, the Paytm app is poised to transform into a third-party app, integrating UPI through other lenders. This shift aligns Paytm with platforms like PhonePe, Google Pay, and Amazon Pay, marking a significant evolution in its operational structure.
