RBI approves Paytm’s payments arm for offline and cross-border payment aggregation

Fintech firm One 97 Communications Ltd, which owns and operate Paytm, said the Reserve Bank of India (RBI) has authorised its wholly owned subsidiary, Paytm Payments Services Ltd (PPSL), to operate as a Payment Aggregator for physical (offline) payments and for cross-border transactions, covering both inward and outward flows.

The authorisation adds to the online Payment Aggregator approval that PPSL received on November 26, 2025, under the Payment and Settlement Systems Act, 2007.

With the latest clearance, PPSL now holds Payment Aggregator licences across online, offline and cross-border segments, allowing it to offer end-to-end payment aggregation services across domestic and international use cases.

“With receipt of this authorisation, PPSL now holds payment aggregator licences across all key segments, enabling it to offer end-to-end payment aggregation services across online, offline and cross-border use cases, delivering seamless payment experiences for merchants, and supporting the company’s long-term growth in domestic and international payment acceptance,” Paytm said in a filing.

The approvals mark a significant milestone for the Vijay Shekhar Sharma-led company, which has been rebuilding its payments stack after the Reserve Bank’s restrictions on Paytm Payments Bank in 2024.

With the payments bank effectively rendered inactive, Paytm had lost its in-house infrastructure to move funds and onboard merchants, and had to rely on third-party payment aggregators, affecting margins, product flexibility and regulatory positioning.

With PPSL now fully licensed, Paytm will be able to deploy and manage its point-of-sale devices and soundboxes across merchant outlets in India and overseas, and directly handle payment acceptance across channels.

To strengthen the subsidiary’s balance sheet, Paytm completed an additional investment of Rs 2,250 crore in PPSL through a rights issue on December 12. The company said the capital infusion was aimed at improving net worth, supporting working capital needs and building leadership in the merchant payments business.

In November, Paytm also transferred its entire offline merchant payments business to PPSL as part of an internal restructuring. The book value of the transfer for FY25 stood at Rs 960 crore, which the company said was intended to consolidate operations in line with regulatory requirements and improve operational efficiency.

During the Q2 earnings call, Sharma said the company would double down on the payments business to sustain profitability. In Q2 FY26, payment processing margin revenue rose 27% year-on-year to Rs 594 crore, while subscription volumes increased to 1.37 crore from 1.12 crore a year earlier. Both streams are driven by merchant usage of Paytm’s devices and digital payments infrastructure.

Paytm reported a profit after tax of Rs 21 crore in Q2 FY26, down 98% from Rs 930 crore in the year-ago quarter. The result was impacted by a Rs 190 crore impairment loss on a loan to its real-money gaming joint venture, First Games. In comparison, the company had booked a one-time gain of Rs 1,345 crore in Q2 FY25 from the sale of Paytm Insider to Eternal.