One 97 Communications, the parent company of Paytm, announced on Wednesday that it has secured an online payment aggregator licence from the Reserve Bank of India (RBI).
The RBI granted a certificate of authorisation to Paytm Payments Services Limited (PPSL), a wholly owned subsidiary of the company, to operate as a payment aggregator on November 26, 2025, as per regulatory filings.
This follows the in-principle approval Paytm received in August this year. Earlier in November, the company’s board also cleared a proposal to invest Rs 2,250 crore in PPSL through a rights issue.
Notably, Paytm transferred its offline merchant business to PPSL in October to comply with RBI’s updated regulations on payment aggregators. The offline business includes merchants serviced through QR codes, Soundbox devices, and Electronic Data Capture (EDC) machines.
Why this Matters
The online PA licence further strengthens the company’s position as an online merchant payment processor. Paytm can now onboard new online merchants and offer them payment services such as point-of-sale (PoS) devices and soundboxes. Until the in-principle approval, it could only serve existing online merchants.
During the Q2 FY26 earnings call, founder Vijay Shekhar Sharma said that Paytm generates higher MDR and net margin from online merchants as compared to offline merchants.
Further, Paytm will also likely save on payment processing charges, which typically range between 0.5% and 2% of the transaction amount. This is expected to boost the company’s bottom line in the coming quarters.
The Paytm Soundbox and PoS devices are at the core of its merchant payments and lending business. In a post-earnings call, Sharma also announced that the company plans to add insurance to this stack.
Sharma further said that he sees AI as a future revenue line. Paytm is piloting AI-based subscriptions for merchants and building AI agents designed to serve as digital C-suite executives for smaller businesses.
A point to note here is that Paytm currently holds only the online PA licence, while rivals such as Razorpay, Pine Labs, and PayU have received approval from the RBI to operate as offline, online, and cross-border payment companies.
Paytm had first applied for a payment aggregator licence in 2020. However, the RBI returned its application in 2022 over non-compliance with foreign direct investment norms.
The Recovery
The licence comes at a time when Paytm is recovering from the downturn triggered by the RBI’s action on its banking arm, Paytm Payments Bank. In January 2024, the payments bank subsidiary was ordered to stop accepting fresh deposits in its accounts or wallets, dealing a major blow to the fintech company.
The numbers suggest the worst is now behind Paytm. The company managed to cling to profitability in Q2 FY26, reporting a consolidated net profit of Rs 21 crore, compared to Rs 930 crore posted in the year-ago quarter. The higher…
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