Paytm Wallet now acceptable on all UPI QRs, online merchants
The National Payments Corporation of India (NPCI) announced wallet interoperability guidelines on Friday (March 24), paving the way for significantly improving the importance of wallets. Now, Paytm Payments Bank (PPBL) has announced that its full KYC customers will be able to make payments on all Unified Payment Interface (UPI) QR codes as well as online merchants where UPI is accepted.
Why does this story matter?
Wallet interoperability is expected to be a huge boost for UPI transactions in India. It will allow prepaid payment instrument (PPI) issuers to settle UPI transactions. Notably, PPBL is India's largest issuer of KYC wallets, with over 100 million users. Therefore, this move will greatly boost Paytm's UPI aspirations, as it trails both PhonePe and Google Pay in UPI transactions.
PPBL will earn 1.1% as interchange revenue
Using Paytm Wallet to make payments to merchants on other payment aggregators or banks will lead to an interchange revenue. PPBL will earn 1.1% of transactions in such cases. When someone adds more than Rs. 2,000 via UPI, PPBL will pay 0.15% of the amount as a charge. If someone uses PPBL to add over Rs. 2,000 to another wallet, PPBL will earn 0.15%.
NPCI's guidelines allow Paytm Wallet to be used everywhere: PPBL
"We welcome NPCI's interoperability guidelines that allow Paytm Wallet to be used in every nook and corner of the country," PPBL's spokesperson said. "As the pioneer of mobile payments and QR-based payments, this move presents incredible growth opportunities for India's payment ecosystem," they added. "In line with RBI's mission of making 'Har Payment Digital,' we are the largest acquirer for UPI merchant payments."
PPBL, largest UPI beneficiary bank in India
PPBL is India's largest beneficiary of UPI payments. According to the bank, it has retained the position for 21 consecutive months. In February 2023 alone, it registered 1,657.41 million transactions. The addition of its wallet to the equation will further enhance this number.
Morgan Stanley, Citi have high hopes for PPBL
Morgan Stanley and Citi said wallet interoperability opens new revenue avenues for PPBL. "If well adopted by Paytm wallet users/merchants, the benefit could be meaningful, as Paytm Payments Bank is the largest issuer of KYC wallets with over 100M users," Morgan Stanley said in a report. Citi has maintained Paytm's "buy" rating, as it believes interoperability improves the salience of wallets.
