Paytm Payments Bank is facing reconsideration from both merchants and users following the Reserve Bank of India’s (RBI) recent restrictions on the platform. The central bank banned the baby bank from accepting deposits, credit transactions, wallets and top-ups in some customer accounts after February 29. While Paytm founder and CEO Vijay Shekhar Sharma has assured users that the app will continue to function normally, concerns among users and merchants persist.
Many users and merchants have expressed fear of potential disruptions in the platform, such as challenges with settlements, changes in platform fees and potential downtime. Merchants who do daily transactions on Paytm Payments Bank are particularly concerned about the impact of the RBI’s directive on their businesses. Some are exploring alternative options due to uncertainties about additional fees and challenges with settling transactions when the node accounts are moved to other banks.
As part of the regulatory action against Paytm Payments Bank, the RBI has ordered the termination of node accounts of One97 Communications and Paytm Payments Services by February 29. Paytm executives mentioned that they are in the process of moving these accounts to other banks, engaging in discussions on business and technology terms.
Individual users
The confusion extends to individual users, with some already withdrawing their money from Paytm Payments Bank following the RBI order. While Paytm assures users that the directives do not affect user deposits in savings accounts, wallets, FASTags and National Common Mobility Card (NCMC) accounts, uncertainty remains among users about the continuity of services like UPI accounts in the Paytm app.
In response to the RBI’s order, Paytm clarified that it does not affect users’ deposits in their FASTags. However, the RBI specified that no further top-ups would be allowed in FASTags after February 29, adding to the uncertainties surrounding the future operations of the platform. As Paytm continues to address concerns and navigate the regulatory challenges, users and merchants are evaluating their options and considering alternative payment solutions.
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