National Payment Corporation of India (a non bank entity) is a ‘Payment System Operator’ and holds a license provided by RBI under the Payment and Settlement Systems Act 2007 to operate the payment/settlements. NPCI has developed Unified Payment Interface (UPI) and it owns and operates it.

Any entity which is using the UPI infrastructure for payments requires a “Third Party Application Provider (TPAP)” approval from NPCI (as NPCI owns UPI). A TPAP is an entity that provides UPI compliant apps to the end user customers to facilitate UPI based payment transactions. Earlier “Paytm Payments Bank” (a group company of Paytm) was approved as TPAP by NPCI but RBI has asked Paytm Payment Bank to shut its operations. (Actually when we were using Paytm app and transferring money through UPI, so it was basically the Paytm Payment Bank which was acting as TPAP)

So, now Paytm (One97 Communication) has applied for TPAP license from NPCI. Once Paytm gets TPAP approval, ‘@paytm’ handles will be migrated from Paytm Payment Bank to some other banks which will act as Payment Service Provider (PSP).

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