Indian Fintech Paytm Gets Reprieve With Axis Deal

(CTN News) – An agreement has been reached between Paytm and Axis Bank Ltd., putting India’s answer to PayPal on the road to survival after a number of regulatory concerns.

Paytm Payments Bank has been replaced by Lender Axis as the backbone of merchant payments settlement business, the company announced on Friday. Up until recently, Paytm Payments Bank was key partner. However, regulatory action threatens much of operations.

The agreement is a victory for billionaire founder Vijay Shekhar Sharma, who has been trying to stabilize his business since regulatory curbs shocked both the company and India’s fintech industry.

Among the country’s top banks, Axis gains payments volume using QR codes and card machines by a brand name that has become synonymous with digital transactions.

The Shares of have lost more than 50% of their value since the regulators ordered Payments Bank to cease its key operations, citing non-compliance.

Analysts speculated that reputation may be damaged as a result of the restrictions, leading some to speculate that digital payments customers may defect to rivals such as Walmart Inc.-owned PhonePe.

Macquarie warns that Paytm faces a serious risk of losing customers

Axis Bank will become nodal account, which will be used for clearing merchant transactions. In addition to boosting merchant confidence, the partnership should allow them to continue receiving their settlements without interruptions on the platform.

Paytm may require partnerships, including peer-to-peer transactions.

As previously announced, India’s banking regulator has given Payments Bank until March 15 to wind down much of its operations. The Paytm banking affiliate provides broader empire with services such as payments and digital wallets.

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