The Reserve Bank of India (RBI) has authorised Paytm Payments Services Limited (PPSL), a subsidiary of One 97 Communications, to operate as a payment aggregator for offline (physical) payments and cross-border transactions. The approval covers both inward and outward cross-border payments and adds to the online payment aggregation licence PPSL received last month.
With this clearance, PPSL can now aggregate payments across all major segments, online, offline and cross-border, under the Payment and Settlement Systems Act, 2007. The authorisation was issued on December 17, 2025, and has been disclosed by the company to stock exchanges under SEBI’s disclosure rules.
Regulatory conditions and compliance requirements
The RBI approval comes with conditions. PPSL must operate strictly under existing payment laws, RBI directions and the terms set out in its Certificate of Authorisation. Any breach can invite regulatory action, including restrictions on operations or cancellation of the licence.
The central bank has also asked PPSL to launch its cross-border payment services within six months from the date of approval and to formally inform the RBI once operations begin. Failure to meet this timeline could attract scrutiny.
Another key requirement relates to system stability and security. PPSL has been directed to report all major incidents, such as cyberattacks, system outages, infrastructure failures, internal fraud or settlement delays, to the RBI within six hours of occurrence. Delays or failures in reporting can lead to penalties under the law.
Implications for the payments business of Paytm
For Paytm’s payments business, the authorisation removes a major regulatory limitation by allowing it to serve merchants across physical stores and international payment flows, not just online checkouts. However, the approval does not relax regulatory oversight. The RBI retains the power to intervene if compliance standards are not met.
The development is significant for India’s payments ecosystem, where regulatory approvals increasingly determine how fast firms can expand into new payment use cases, especially in cross-border transactions that involve higher compliance and risk controls.
Background to the Paytm approval
The latest approval builds on the online payment aggregator licence that PPSL received from the RBI on November 26, 2025, after securing in-principle clearance earlier this year. As part of regulatory compliance, Paytm had already moved its offline merchant acquiring business, covering QR-based payments, Soundbox devices and card machines, to PPSL in October.
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Paytm had first applied for a payment aggregator licence in 2020, but the RBI returned the application in 2022 due to issues related to Foreign Direct Investment (FDI) norms. The sequential approvals granted in November and December mark the completion of a regulatory process that has stretched over several years.
The transfer of Paytm’s offline merchant business to PPSL was part of an internal restructuring exercise approved by the company’s board in October to comply with the RBI’s updated payment aggregator framework. For FY25, the offline merchant payments business generated Rs 2,580 crore in revenue on a standalone basis, accounting for about 47% of Paytm’s standalone revenue.
Financial context
The approval comes at a time when Paytm’s payments business is showing growth, even as overall profitability remains uneven. In Q2 FY26, Paytm Payments Services Limited reported a 25% year-on-year rise in total payment services revenue to Rs 1,223 crore, supported by a 27% increase in payments gross merchandise value to Rs 5.7 lakh crore.
At the group level, One 97 Communications posted a consolidated net profit of Rs 21 crore for the quarter ended September 2025, down sharply from a year earlier due to a Rs 190 crore write-down linked to its gaming joint venture, despite a 24% rise in operating revenue to Rs 2,061 crore.
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