Migration of Paytm users to other service providers may take up to six months

As per news report, people familiar with the matter said that to migrate all the existing Paytm customers to another payment service provider it can take three to six months. It is also reported that Paytm is planning to apply for a third-party application provider (TPAP) licence from the National Payments Corporation of India (NPCI).

A TPAP license will make sure that the Paytm users continue to make digital payments through Unified Payments Interface (UPI). This comes amid concerns that the Reserve Bank of India (RBI) may revoke its payments banking licence, with Paytm Payments Bank being barred from accepting deposits and credit transactions from March 15.

“It depends on how the RBI is thinking about the entire process. The shift does not happen overnight or over a period of a few days. The process of migrating all Paytm customers to another payment service provider (PSP) may take anywhere between three months and six months, given the large number of customer base that Paytm has,” said a person in the know.

Another person aware of the development said that Paytm was hoping that its virtual payment address (VPA) ending in @paytm to remain functional beyond March 15. A VPA is a unique identifier that customers can use to send and receive money on UPI.

“As the company partners with PSPs while taking the TPAP route, it is anticipated that the existing VPA will remain functional for some time after March 15,” the person said.

Paytm is in discussion with Axis Bank, HDFC Bank, and State Bank of India (SBI) for UPI services partnership, as per sources.

Currently, Paytm users can make UPI payments with their VPAs ending in @paytm, thanks to the payments bank licence issued to Paytm Payments Bank in 2017. This licence enabled it to become a PSP. A PSP bank, either through its own application or a TPAP, onboards and registers customers on UPI, linking customers’ bank accounts to their respective UPI IDs. A TPAP, on the other hand, is a service provider that participates in UPI through a PSP bank, according to the NPCI website. The NPCI runs the UPI ecosystem in India.