The Reserve Bank of India granted in-principle approval to Paytm's Payment Services unit to operate as an online payment aggregator on 12 August 2025. The One97 Communications unit had been barred from onboarding new online merchants since November 2022. The approval means that Paytm's payments intermediation business can proceed towards full authorisation under the RBI's payment aggregator licensing framework, after the RBI returned the unit's original application in November 2022 over foreign direct investment rules.
The clearance follows the RBI's January 2024 restrictions on Paytm Payments Bank, which curtailed the business activities of that entity and were followed by a year-on-year decline in the company's revenue.
FIRST-QUARTER RESULTS
The company reported a profit of INR 122.5 crore in the first quarter of financial year 2026, compared with losses that exceeded INR 800 crore in the equivalent period the prior year. Paytm's lending business operates under the Default Loss Guarantee model, an arrangement that allows Paytm to facilitate credit products through partner financial institutions while absorbing a defined portion of any default losses that arise.
PAYMENT AGGREGATOR RULES
Payment aggregators collect payments from customers on behalf of merchants and settle funds after deducting their service fees. Regulated payment aggregators must meet the RBI's requirements around net worth, data localisation, customer due diligence, and grievance redressal. Securing in-principle approval confirms that the Payment Services unit has satisfied the initial threshold criteria and may proceed to demonstrate full compliance ahead of the grant of a final certificate of authorisation.
The remaining step is converting the in-principle approval into a final licence.