Paytm extends full interoperability, allows wallet users to pay via UPI QR codes

This comes after the Reserve Bank of India (RBI) mandated all Prepaid Payment Instruments (PPI) like wallets to be interoperable with UPI and card networks by March 31 last year.

However, fintech firms had found it difficult to fully implement RBI’s order due to issues around zero merchant discount rates (MDR) for UPI and interchange fees.

One97 Communications Ltd which owns 49% stake in PPBL said in a stock exchange filing on Monday that the payments bank will “have a beneficial impact in the form of meaningfully lower interchange fees paid to PPBL for Paytm wallet, since this is now based on the lower standardized interchange.”

Paytm said in a statement that the “Bank (PPBL) will earn 1.1% interchange revenue when its wallet customers (i.e., the KYC wallets issued by Paytm Payments Bank) make payment on merchants acquired by other payment aggregators or banks.”

PPBL will pay 15 basis points (bps) as charges for adding more than ₹2,000 using UPI, and in turn will also earn 15 bps when any other wallets use the bank to add more than ₹2,000 using UPI, it said.

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One basis point in one-hundredth of a percentage point.“We welcome NPCI’s interoperability guidelines that allows Paytm Wallet to be used in every nook and corner of the country. This is in line with our mission to bring mobile payments to every Indian everywhere,” a Paytm spokesperson said.

Paytm said it had 100 million wallet users in the country.

Last year, payments infrastructure platform Juspay also announced the launch of its software stack called OpenPPI to help PPIs comply with RBI’s mandate and enable interoperability through UPI.

In February, PPBL processed 1.02 billion transactions on UPI, which included on-us transactions where the issuing and receiving bank of the payment are the same.