Paytm shifts its settlement operations to RBL Bank using its proprietary card terminals.

Two reliable banking sources have revealed that Paytm intends to transfer its point-of-sale (PoS) terminals, which are used for processing card payments at merchant establishments, to RBL Bank. Although One 97 Communications, the entity operating Paytm, will retain operational control over these terminals branded as Paytm, RBL Bank will handle the transaction processing. Transactions made with Visa, Mastercard, or RuPay cards at Paytm’s PoS terminals will be settled through RBL Bank’s ‘bin’, according to one of the bankers. These transactions will then be directed to Axis Bank’s nodal accounts for eventual settlement with the merchant. On February 16, One 97 Communications announced the shift to Axis Bank’s services for all nodal accounts, transitioning them from Paytm Payments Bank. Despite attempts to elicit a response, requests for comment sent to RBL Bank and Paytm remained unanswered. The second banker noted that while Paytm may establish nodal accounts with additional banks in the future, they currently operate through Axis Bank, with card payments routed from RBL Bank to Axis Bank. This strategic move is expected to significantly augment RBL Bank’s PoS terminals by over 500,000 units, potentially amplifying transaction volumes on its systems by at least 50%, according to one of the bankers. Furthermore, Paytm’s transition to a third-party payment application on UPI is poised to commence following the expiry of the extended deadline for Paytm Payments Bank to cease basic banking services on Friday. NPCI recently disclosed that UPI payments made through the Paytm app will be supported by Axis Bank, Yes Bank, State Bank of India, and HDFC Bank. Yes Bank will manage volumes from Paytm under the @paytm handle, as per NPCI’s website details, with new handles being tested by NPCI for Axis Bank (ptaxis) and Yes Bank (ptyes) in a closed user group. Efforts are currently underway for the involvement of the other two banks.