India’s digital payments sector has reached a major turning point. Paytm Payment Services has finally received a full online payments aggregator license from the Reserve Bank of India (RBI). This approval not only represents a significant relief for Paytm but also brings renewed hope to millions of businesses, both large and small.
Paytm Payment Services: Wednesday was a significant day for India’s digital payments industry. The Paytm Payment Services file, once held up due to non-compliance, has finally moved forward. The Reserve Bank of India (RBI) has granted the company an official license as an online payment aggregator. With this approval, Paytm will not only be able to onboard new merchants but also strengthen its foothold in the entire digital payments ecosystem.
Major relief after a two-year delay
Paytm Payment Services, a subsidiary of One 97 Communications, received this license on November 26th. Previously, the RBI granted in-principle approval in August 2024. However, the story wasn’t so simple: in November 2022, the RBI returned Paytm’s file citing violations of FDI rules. Subsequently, the company obtained clearance from the Finance Ministry and addressed all deficiencies in August 2024. This approval is now considered a major turning point for the company.
New merchants will now be able to join Paytm.
Prior to receiving the approval, Paytm was unable to add new merchants and was only servicing existing merchants. But now, new merchants will be onboarded, the payment processing business will grow rapidly, and Paytm’s position in the digital payments market will be strengthened. This license is required for companies that provide services such as online payment collection, payment processing, and payment settlement.
Who will Paytm compete with?
Currently, several major fintech players, including Razorpay, Cashfree, Pine Labs, and PayU, have already obtained all three types of payment aggregator licenses (online, offline, and cross-border). Paytm has now received a formal license for online payment processing only, but this represents a significant step forward for its core business.
Financial performance also improved
The company reported a net profit of ₹21 crore in the September 2025 quarter, while revenue increased 24% to ₹2,061 crore. This result also reflects positively on Paytm’s financial position.
What will change after this approval?
- Paytm’s hold on the online payments market will strengthen.
- Payment services will become easier for merchants.
- The Digital India mission will gain new momentum.
- Paytm’s payments business will be able to expand rapidly.
