PayTm shifts nodal account to Axis Bank for continuity of transactions

Fintech firm One97 Communications, owner of the brand Paytm, has shifted its nodal account to Axis Bank from Paytm Payments Bank.

The move will allow continuity of Paytm QR, Soundbox, and card machine after the 15 March deadline set by the Reserve Bank of India (RBI), as per a regulatory filing.

The RBI has advised customers and merchants of Paytm Payments Bank Ltd (PPBL) to shift their accounts to other banks by 15 March, giving 15 more days to the beleaguered entity to close most of its operations, including deposit and credit transactions.

"The company has also shifted its nodal account to Axis Bank (by opening an escrow account) to continue seamless merchant settlements as before. This arrangement is expected to seamlessly replace the nodal account that OCL was using with Paytm Payments Bank. Paytm Payment Services Ltd (PPSL), OCL's wholly owned subsidiary has already been using the Axis Bank services since its inception," Paytm said in a filing.

The nodal account of Paytm is like a master account in which all its customers, merchant transactions are settled.

The RBI in the list of FAQs has clarified that Paytm QR code, Paytm Soundbox or Paytm POS terminal will continue to work after March 15 if it is linked to other banks instead of PPBL.

"We are committed to providing seamless service to our merchant partners, with focus on compliance and regulatory guidelines. We assure our users that the Paytm app, and our pioneering devices like Paytm QR, Soundbox, Card Machine will continue to work as always.

"The shift of the nodal account to Axis Bank (by opening an escrow account) will ensure seamless merchant settlements as before. We strive to continue to empower Indians, contributing significantly to the country's financial inclusion journey," a Paytm spokesperson said.

The RBI has advised PPBL customers to obtain a fresh QR code linked to an account with another bank or wallet to receive payments after 15 March. "You may also change your bank account details (in which you receive payments) through your service provider," Paytm management had said earlier this month.

Paytm will also work with other banks to change the virtual payment address linked to PPBL that merchants use for accepting transactions, so that there is no disruption in their transactions after the RBI set a deadline.