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While One 97 Communications, which runs Paytm, will continue to operate and manage these terminals carrying the Paytm brand at the backend, the processing of transactions will be done by RBL Bank, the bankers told ET.
“In technical parlance, it is called ‘bin’; so any Visa, Mastercard or RuPay card payments made at Paytm’s PoS terminal will be settled via the 'bin' of RBL Bank,” one of the bankers said, asking not to be named.
The transactions will be passed on to the nodal accounts of Axis Bank for eventual settlement with the merchant. On February 16, One 97 Communications (OCL) said it has started using the services of Axis Bank for all its nodal accounts, moving them from Paytm Payments Bank (PPBL), an associate entity of OCL.
Emailed queries to RBL Bank and Paytm went unanswered.
“Eventually as things settle down, Paytm might set up nodal accounts with more banks but as of now they are using Axis Bank, so card payments will be sent from the RBL Bank system to Axis Bank,” the second banker said.
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The move will increase RBL Bank’s total PoS terminals by more than 500,000.
Data from RBI showed the private lender has currently deployed around 840,000 PoS terminals.
“It is estimated to help RBL Bank push up the volume of transactions on its own systems by atleast 50%,” one of the bankers said.
The central bank’s extended deadline for PPBL to stop its basic banking services ends Friday. From Saturday, Paytm will start operating as a third-party payment application on UPI.
NPCI announced on March 14 that Axis Bank, Yes Bank, State Bank of India and HDFC Bank will support UPI payments processed through Paytm app.
As per details shared by NPCI on its website, Yes Bank will be handling volumes from Paytm through the @paytm handle. Currently, NPCI is testing out in a closed user group new handles to be created with Axis Bank (ptaxis) and Yes Bank (ptyes). The other two lenders are still under work in progress.