Paytm: Paytm gets NPCI nod to onboard users on UPI, shares up 11%

One 97 Communications that runs digital payments application Paytm said it received clearance from the National Payments Corporation of India (NPCI) to restart onboarding of new customers for its Unified Payments Interface service.

The company’s shares, which closed 5.3% down on Tuesday when it reported second-quarter results, were trading more than 11% higher at Rs 764.75 at noon Wednesday on the BSE.

In its letter to Paytm founder and chief executive Vijay Shekhar Sharma on Tuesday, NPCI that manages the UPI platform said upon examination of the company’s application received on August 1, it has allowed Paytm to onboard new users for the payment service. Paytm attached the letter to its late-night regulatory filing on Tuesday.

NCPI’s approval will enable Paytm to start adding new customers through its partner lenders Yes Bank, Axis Bank, HDFC Bank and State Bank of India. This may finally help Paytm get back on track in the consumer payments business and expand market share.

NPCI said Paytm must abide by Reserve Bank of India regulations on digital payments, NPCI rules for UPI payments and also adhere to agreements it has signed with its partner lenders.

Addressing analysts after the presentation of its second-quarter results, Sharma said he was keenly awaiting the NPCI approval for UPI payments. As a homegrown application, this would enable Paytm address the market share concentration concerns on UPI.

Sharma also added that he would focus on spending on promotions and cashbacks to encourage users to start using UPI via the Paytm app. The company had otherwise drastically cut its expenses on payment incentives to Rs 23 crore in the September quarter, compared with Rs 73 crore a year back.In the September quarter Paytm reported operational revenue of Rs 1,660 crore and a net profit of Rs 930 crore, aided by a one-time cash infusion through the sale of its ticketing business to Zomato.