Paytm Payments Services has receive an extension from the country’s banking regulator to apply for a payment aggregator licence and aims to reapply in about 15 days, the company said. As Paytm Payments Services can continue with the online payment aggregation business for its existing partners, without taking on any new merchants, the Paytm said in a notification to stock exchanges.
Paytm Payments Services is a wholly own subsidiary of One 97 Communications.
Payment aggregators, platforms that bring together various online payment options, must be license by India’s central bank and banking regulator, Reserve Bank of India.
In November, India’s banking regulator had decline a payment aggregator licence for the One 97 Communications unit that owns the popular Paytm brand.
Paytm said that the latest move has no material impact on its business and revenue and for the offline part of the business, the Paytm can continue to take on new merchants and offer them payment services.
In February, Paytm said EBITDA (earnings before interest, taxes, depreciation, and amortisation), an indicator of operational profit, before ESOP cost margin improve to Rs. 31 crore during the third quarter end on 31st December, 2022.
Paytm has calculate an incentive of Rs. 130 crore from UPI transactions in three quarters but CEO Vijay Shekhar Sharma said that the incentive may technically make the fourth quarter a free cash flow positive quarter but Paytm will report as a one-time item.
Vijay Shekhar Sharma said :
“UPI incentive will be one-off and we will explicitly call out as one-off. Rs. 130 crore that we are quoting is for three quarters. The fourth quarter number will be topped on top of it. Because we are calling it one-time item, we are not calling it free cash flow generative. We would rather say free cash flow generative when we are consistently sure of it,”.
