Switch from Paytm to Other Platforms: Business Body to Traders | India Business News – Times of India

MUMBAI: Many small shopkeepers and hawkers, onboarded for digital payments by Paytm, are unaware of RBI’s move to ban Paytm Payments Bank from accepting fresh deposits after February 29. Some who are aware, including Uber drivers, are wary of accepting Paytm payments and are asking for cash.
Confederation of All India Traders national president B C Bhartia on Sunday issued an advisory to traders to switch from Paytm to other payment platforms. He said that small vendors and kirana store owners have no idea about what has happened, and the larger ones among them, who are aware, are worried.
“Patym is telling us that they will tie up with other banks, and there will not be any issue, but we do not know how the new setup will be,” he added.
Paytm’s stock hit the 20% lower circuit for two successive days following RBI’s move to slap severe restrictions on the business of its subsidiary Paytm Payments Bank. Those merchants with UPI QR code stickers linked to Paytm Payments Bank will have to look for alternatives after February 29.
Paytm’s rivals, PhonePe and MobiKwik, are expanding their on-ground presence to onboard merchants. “PhonePe is assuring us of the safety of their systems, encouraging us to use their platform,” said a trader.
Responding to queries, a PhonePe spokesperson said, “We are experiencing an increase in merchant requests for QR codes and smart speakers, and we are ensuring to fulfil that demand.”
Paytm is exploring getting a new bank to slip into Paytm Payments Bank’s role, but it still needs to clarify on whether mass transition is possible.
SBI chief Dinesh Khara is open to acquiring Paytm’s merchant bank accounts via a subsidiary, SBI Payments, while the lender is keen on merchant bank accounts. Axis Bank and HDFC Bank are also potential players in merchant acquiring space.
TOI spoke to a few small vendors who exclusively accepted digital payments through Paytm, and none of them were aware of the implications
A vegetable vendor in Mumbai’s Andheri with a Paytm QR code for consumer payments returned an empty look, saying, “Mujhe nahi pata” (I don’t know). The owner of an electrical store had a similar response.
“If other fintech players acquire merchants, they will have to undergo a ‘re-KYC process’,” said Monica Jasuja, fintech expert and startup adviser. “Paytm’s sweet spot was serving merchants of all sizes, leveraging economies of scale. However, a financial model shift disrupts this. Merchants, particularly smaller ones, might resist increased costs, leading to churn. Banks and fintechs, with deeper pockets, could exploit this vulnerability, launching aggressive acquisition campaigns,” Jasuja added.
There is no clarity on whether the regulator will insist on replacing all QR codes if Paytm switches to another bank. “QR codes must be issued by a bank or a certified TPAP (third-party application provider). Unless Paytm gets a TPAP licence from NPCI (National Payments Corporation of India), which is likely to take time, they cannot issue fresh QR codes. They could lose many merchants,” said an analyst.

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