Paytm, a provider of financial services and digital payments, has provided an update to the exchanges regarding Paytm Payments Services, a wholly owned subsidiary.
The fintech business reported receiving a letter from the Reserve Bank of India (RBI) in response to a request from a subsidiary for authorization to offer payment aggregator services to online retailers.
Now, the business has 120 calendar days to reapply for the payment aggregator services. In order to comply with regulations regarding foreign direct investment, the company will first seek the necessary approval for the prior downward investment from Paytm into its subsidiary.
The business will not bring on any new online merchants during this period.
"We can keep bringing on more offline retailers and provide them with payment options like All-in-One QR, Soundbox, Card Machines, etc. The services will not change for current online retailers, so PPSL can continue to do business with them "The business stated this in its exchange filing on Saturday.
In essence, this means that Paytm's solid business growth is likely to continue, with no change to its profitability target because the company can keep working with its current online retailers.
Additionally, this development won't have an impact on Paytm's expanding base of device deployments or its expanding base of offline payments because it can keep bringing on new merchants.
Because the communication from RBI only applies to the onboarding of new online merchants, the company made it clear in its filing that it has no material impact on its business or revenues.
The company stated in the filing, "We are hopeful of receiving the necessary approvals in a timely manner and resubmitting the application."
