After a prolonged wait marked by regulatory hurdles, Paytm Payments Services Limited (PPSL) has finally received “in-principle” authorisation from the Reserve Bank of India (RBI) to operate as an online payment aggregator. The approval was confirmed by its parent company, One 97 Communications, in a regulatory filing on Tuesday.
The RBI’s clearance, issued via a letter dated August 12, 2025, lifts a ban imposed on November 25, 2022, which had prevented PPSL from onboarding new merchants. With this green light, the company can now resume merchant onboarding and expand its role in India’s fast-growing digital payments ecosystem.
A Long Road to Approval
PPSL had first applied for the licence in March 2020 under the Payment and Settlement Systems Act, 2007. However, the process hit a roadblock due to Foreign Direct Investment (FDI) compliance issues. These regulatory concerns contributed to repeated delays, stalling the company’s payment aggregator ambitions for nearly five years.
The breakthrough comes less than two weeks after Chinese tech giant Alibaba Group completely exited One 97 Communications, selling off its remaining stake. Industry observers believe the exit may have cleared one of the key FDI-related compliance concerns that had held up the approval.
Strengthening India’s Digital Payment Landscape
With the RBI’s in-principle nod, PPSL is now poised to compete with other major players in the payment aggregator space, facilitating online transactions for businesses across sectors. The company is expected to integrate a broader range of merchant services, enhance payment processing capabilities, and expand its digital infrastructure.
The development is seen as a major win for Vijay Shekhar Sharma-led Paytm, which has been under increased regulatory and investor scrutiny in recent years. Market analysts say the approval could boost merchant trust, help Paytm regain market share, and potentially improve investor sentiment.
As India’s digital payments market continues to surge, Paytm’s re-entry into merchant acquisition could signal a new chapter in its journey — one driven by compliance, renewed partnerships, and an eye on sustainable growth.
