Paytm Payments Services has finally received the green light from the Reserve Bank of India to operate as an online payment aggregator, ending a wait that has lasted for years. The confirmation came through a regulatory filing from its parent company, One 97 Communications, on Tuesday. This decision also removes the ban that had stopped Paytm Payments Services Limited (PPSL) from adding new merchants since November 25, 2022.
The Long-Awaited Approval
In its filing, the company said that Paytm Payments Services Limited (PPSL) — a wholly-owned arm of One 97 Communications Limited (OCL) — has been granted ‘in-principle’ authorisation by the Reserve Bank of India to function as an Online Payment Aggregator under the Payment and Settlement Systems Act, 2007. The RBI’s approval letter is dated August 12, 2025.
The application for this licence was first submitted in March 2020. However, the approval process took longer than expected due to compliance checks around Foreign Direct Investment in the company. Interestingly, this clearance comes not long after Chinese tech giant Alibaba Group fully exited its stake in One 97 Communications.
Conditions That Come With the Licence
The RBI has made it clear that PPSL must follow the Guidelines on Regulation of Payment Aggregators and Payment Gateways, including updates shared on March 31, 2021. The authorisation applies only to PA operations covered under these rules. Any other services, like merchant pay-outs, will have to go through different approved channels and not via PA escrow accounts.
There’s also a strong focus on security. The RBI has instructed PPSL to complete a System Audit with a detailed cybersecurity assessment. This has to be done by recognised professionals — such as CERT-In empanelled auditors, Certified Information Systems Auditors (CISA), or DISA-certified experts. The audit must confirm that PPSL is following the Master Direction on Cyber Resilience and Digital Payment Security Controls for non-bank Payment System Operators, along with RBI’s rules for Storage of Payment System Data.
The findings have to be submitted within six months from the approval date. If not, the in-principle authorisation will be cancelled automatically. The company will also need RBI’s permission before making any changes to its shareholding or ownership structure.
Market Reacts Positively
The stock market welcomed the news. On the day after the announcement, shares of One 97 Communications jumped 4.8%, hitting a new 52-week high of ₹1,173.70 on the BSE. A day earlier, Paytm’s stock had closed slightly lower at ₹1,119.95 on the BSE.
