Paytm to stop using third-party payment orchestration, shifts to direct processing from April 1

Noida-based fintech major Paytm has announced that it will no longer use third-party payment orchestration platforms like Juspay and will instead process transactions directly.

Starting April 1, 2025, Paytm Payments Services Limited (PPSL) will only support payments routed through its own system, and it has asked businesses to make the switch before the deadline to avoid service disruptions.

Paytm is the latest major fintech company to move away from external orchestration services, joining Razorpay, PhonePe, and Cashfree Payments in an industry-wide shift.

Concerns over payment routing engines

Third-party orchestration platforms, including Juspay, have been popular for helping merchants work with multiple payment gateways. By analyzing various factors, these platforms decide which gateway to use for each transaction, often improving success rates.

However, payment gateway companies say this setup gives orchestration firms too much influence over which gateway is chosen. They also worry about transparency, especially since Juspay holds a payment aggregator license and may compete directly by offering its own services to merchants.

Juspay’s response and open-source initiative

In March, Juspay took a step to address criticism by open-sourcing its payment routing engine, Hyperswitch, which lets businesses customize and manage payment flows without being tied to proprietary technology.

Even so, some payment gateways remain cautious, pointing to concerns about how routing decisions are made. Juspay is reportedly in talks to raise $150 million from investors, a move that could expand its reach in the payments sector.

Growing industry tensions

PhonePe was the first to end its partnership with Juspay in December, followed by Cashfree Payments and Razorpay. By dropping orchestration services, these platforms hope to gain more direct control over merchant relationships and transaction flows.

Juspay, for its part, says gateways that refuse to connect through its platform risk losing out, adding that this affects not only individual merchants but also the broader payments ecosystem.

Impact on merchants

With Paytm now urging businesses to route transactions directly through its gateway, merchants have a clear deadline to make the necessary changes. Paytm says it can support a wide range of payment methods and handle large transaction volumes during peak times.

According to the company, going direct will give merchants a more reliable and streamlined experience.

The shift also reflects a trend among leading payment firms that are looking to offer integrated solutions without depending on external routing engines, signalling a major change in how digital payments are handled across India.