Paytm completes merchant migration to YES Bank: Vijay Shekhar Sharma

NPCI notified in March that YES Bank would act as merchant acquiring bank for existing and new UPI merchants for OCL

One97 Communications (OCL), the company that operates the brand Paytm, has completed the migration of merchant handles on its platform to YES Bank after the National Payments Corporation of India’s (NPCI’s) direction last month, firm’s founder and managing director Vijay Shekhar Sharma said on Monday. 

Sharma’s remarks came during a webinar. He spoke at the launch of the company’s two new soundbox devices for unified payments interface (UPI) and Credit Card on UPI payments.

"The migration (of merchants) is completed and the system is running on YES Bank’s back end. As far as the (KYC) work is concerned, YES Bank can decide whom they want to get additional verification done,” Sharma said.

In March, the NPCI notified that YES Bank would act as a merchant acquiring bank for existing and new UPI merchants for OCL. Similarly, four banks - Axis Bank, HDFC Bank, State Bank of India, and YES Bank now act as PSP (Payment System Provider) banks to OCL. 

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Sharma also welcomed the Reserve Bank of India’s (RBI’s) draft regulation for payment aggregators (PAs) published this month where the regulator outlined Know Your Customer (KYC) procedures for small and medium-sized merchants. 

“We have been extremely strict about our merchant onboarding. Once this new guideline comes into play, our process will not change materially,” he added. 

Sharma explained that the framework would ‘standardise’ merchant wooing in the future. 

“The regulator's approach towards standardisation of onboarding of merchants is a good step," he said, adding that this was an area where payment aggregators had their own process, but will now be standardised.

Sharma elucidated that the board of Paytm Payments Bank was independent and capable of addressing any regulatory issues.

“I, personally or anyone at OCL, can have no connection whatsoever with the Payments Bank. There is an independent board, the board is actually very capable, and they are working with whatever the process requirements are,” he said in response to a query on the future of Paytm Payments Bank (PB).

Sharma owns 51 per cent of Paytm PB, while the remaining 49 per cent is owned by OCL. 

Last month, Paytm PB decided to rejig the board by inducting former bureaucrats and public sector bankers while removing Sharma as a part-time non-executive chairman and board member.

When asked what has changed with respect to its business post RBI’s crackdown, Sharma said the company’s business model remained unchanged. 

“The core business model of Paytm stays the same; we acquire customers on payments, whether they are consumers or merchants, and we cross-sell and distribute other financial services. The model gets amplified now because of payment partnerships as we are able to work deeper with other financial institutions and banks,” he said.