Paytm won approval from India’s finance ministry to invest in its payment services operation.
The company announced the approval Wednesday (Aug. 28) in a disclosure posted to its website. Paytm has faced scrutiny this year after being ordered to close its payments bank in January.
Paytm said it will now apply with the finance ministry to get back its payment services license.
“We remain committed to a compliance-first approach and upholding the highest regulatory standards,” the company said in its letter. “As a homegrown Indian company, Paytm is focused on contributing to and advancing the Indian financial ecosystem.”
Paytm has been struggling since the Reserve Bank of India (RBI) — the country’s banking regulator and central bank — suspended business at Paytm Payments Bank, which had processed much of Paytm’s payments.
The RBI made the move after an audit uncovered “persistent noncompliances and continued material supervisory concerns,” although the regulator had been warning for years about the questionable relationship between Paytm and its banking arm.
Last month, Paytm reported that its operating revenue slipped again in the quarter ending in June as it continued to wrestle with regulatory issues.
Operating revenue fell from 19.8 billion rupees (about $236 million) in the last quarter to 15 billion rupees (about $179 million). That was down from 23.4 billion rupees (about $279 million) in the same period a year ago.
“The full financial impact of the recent disruptions was seen during this quarter,” Paytm said in an article on its website. “With green shoots visible across — growth in merchant payment operating metrics, gross merchandise value (GMV), accelerated merchant reactivation and an expanding merchant base, coupled with our continued focus on cost optimization — we remain optimistic about our revenue and profitability improvement.”
This year saw Paytm lose ground on India’s Unified Payments Interface (UPI) to the likes of Google Pay and the Walmart-backed PhonePe.
These companies are competing for consumer attention in a country that has been on a digital payments journey for the past 15 years, PYMNTS wrote in late 2023. PYMNTS Intelligence research showed that digital wallets are now the preferred payment method for more than half of all retail purchases in India, with 8 in 10 digital wallet users opting for UPI.
