After the latest stringent action by the Reserve Bank of India (RBI) against Paytm Payments Bank, an associate of fintech major One97 Communications that operates popular Paytm app, the users of the platform have been a harried lot due to various interlinked functionalities on the app. The RBI's action against Paytm Payments Bank means no transactions can be carried out using any of its products i.e. savings bank account, wallet, FASTag, or national common mobility cards, from February 29, 2024.
In a message to millions of Paytm users on X today, Vijay Shekhar Sharma, CEO, Paytm, said the "Paytm app is working & will keep working beyond 29th Feb, 2024 as well". "For every challenge, there is a solution and we are sincerely committed to serve out nation in full compliance."
However, it's the Paytm Payments Bank that has faced the axe, and will stop any business after February 29. This was the second tough action by the RBI against Paytm Bank after March 2022.
But, what does this mean if you are a common Paytm app user, like millions of others users? Should you worry if essential services like FASTag, UPI, and Wallet will work on the app or not? Let’s try to answer these questions.
Will there be any impact on the Paytm app?
No, there will not be any impact on services like UPI or wallet on the core Paytm app itself. Users can continue using UPI on the Paytm app. The associate entity, Paytm Payments Bank, has been asked to stop facilitating any services.
If you are a Paytm Bank user, how long can you use it?
Paytm Payments Bank users can use their savings account balances, wallets, FASTags, NCMC accounts, etc., till February 29, 2024. After that, no transactions can be carried out using any Paytm Payments Bank products.
Will FASTag work on Paytm app?
There are millions of FASTags users on the Paytm Payments Bank. Most of them are already distributed by other banks. The RBI has given one month to Paytm to terminate its nodal accounts with Paytm Bank. The company says it is in the process of moving nodal accounts to other large commercial banks. If the nodel transfer happens before the deadline, users can continue using the balance via third-party banks.
"There are a set of products that the Paytm app offers to users, some products like FASTag are already distributed by other banks will continue," says President and COO Bhavesh Gupta.
Will your PoS machine or Soundbox work?
There won't be any impact on services like Paytm QR, Paytm Soundbox, and Paytm Card Machine. These services are separate from Paytm Bank so they will continue business as usual. Paytm has said One97 Communications, as a payments aggregator for online and offline merchants, works with various banks, including Paytm Bank. But now, it will only work with other banks, not with Paytm Bank. "Out merchant payment services are not impacted. Our offline payment network offerings like Paytm QR, Paytm Soundbox, Paytm Card Machine, will continue as usual, where we can onboard new offline merchants as well," says the company.
Are Paytm & Paytm Payments Bank the same?
There is an impression that Paytm Payments Bank and Paytm are one but by structure, but it is not. "It is an associate company. For Paytm Payments Bank, there is independent compliance, risk team and other requirement," says Madhur Deora, president, Paytm.
