Indian fintech Paytm wins a major regulatory battl...

Indian fintech big Paytm has obtained long-awaited approval from the nation’s central financial institution to function as a cost companies supplier for on-line retailers — simply days after one among its Chinese language buyers offered its total stake — marking a key regulatory breakthrough after months of setbacks and scrutiny.

On Tuesday, the Reserve Financial institution of India granted “in-principle” approval to Paytm’s Cost Companies unit to function as a web-based cost aggregator, dad or mum firm One97 Communications stated in its filing (PDF) to Indian inventory exchanges. The approval comes greater than two years after the Noida-based fintech was initially denied the license in November 2022 due to non-compliance with India’s guidelines on receiving investments from nations that share a land border.

With out the license, Paytm was barred from onboarding new on-line retailers. On the time, the corporate stated the restriction had “no materials impression” on its enterprise or revenues. Nevertheless, at its annual normal assembly final September, One97 Communications founder and CEO Vijay Shekhar Sharma stated his intention to reapply for the cost aggregator license.

The approval additionally comes over a 12 months after the RBI banned Paytm Payments Bank from accepting recent deposits and enabling credit score transactions. Paytm weathered that impression by quickly shifting gears and partnering with Axis, HDFC, State Financial institution of India, and Sure Financial institution to make them function cost system suppliers for its customers and retailers concerned in on-line transactions and autopay mandates.

With the brand new license, Paytm can operate as a service provider for on-line retailers, enabling them to simply accept a variety of cost strategies, together with playing cards, web banking, and the Indian government-backed Unified Funds Interface (UPI). The approval additionally lifts the net service provider onboarding restrictions imposed by the central financial institution in 2022.

The approval comes only a week after China’s Ant Group exited Paytm by promoting its remaining 5.8% direct stake in One97 Communications for $454 million by block offers. This follows an earlier exit in 2023, when Ant Monetary sold a 10.3% stake — worth $628 million — to Sharma in a no-cash deal.

Paytm is required to undertake a “system audit,” together with a cybersecurity overview, and submit its report back to the Reserve Financial institution of India inside six months. If it fails to take action, the approval will lapse, per the RBI letter enclosed with the corporate’s inventory trade submitting. The license can also be restricted to on-line cost companies and doesn’t prolong past that scope.

The newest growth will assist Paytm management most of its worth chain, from its offline sound packing containers to the net cost gateway, and scale back its reliance on different financial institution companions, fintech investor Osborne Saldanha advised TechCrunch.

Paytm is at present the third most-used UPI payments platform, behind Walmart-owned PhonePe and Google Pay. The fintech accounted for six.9% of the whole 18.4 billion UPI transactions in June and 5.6% of the transaction worth, per the Nationwide Funds Company of India (NPCI). In complete, Paytm processed 1.27 billion UPI transactions price ₹1.34 trillion (roughly $15 billion).

Though Paytm trails PhonePe and Google Pay within the UPI market — with the duo dealing with over 82% of all UPI transactions in June — the corporate gives a broad suite of companies and companies to draw each customers and retailers. These embody offline service provider cost options with built-in {hardware}, software program, and repair layers, in addition to a rising credit score and lending enterprise.

Paytm reported (PDF) web earnings of ₹1.23 billion (roughly $14 million) for the primary quarter of its monetary 12 months 2026, ending in June — a turnaround from a loss throughout the identical interval final 12 months. The outcomes beat expectations, as analysts had projected a lack of ₹1.27 billion (roughly $14.5 million). Income rose 28% year-over-year to $224 million, whereas the corporate’s contribution margin improved to 60%, up from 50% a 12 months in the past.

Along with its latest monetary progress, Paytm’s shares have risen 13.25% year-to-date in 2025, signaling that the corporate is starting to regain market confidence after greater than a 12 months of regulatory setbacks. The inventory closed at ₹1,118.50 (roughly $13) on Wednesday, simply earlier than the regulatory approval was introduced.