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RBI ASKS NPCI TO CONSIDER PAYTM’S REQUEST FOR TPAP: WHAT IS IT & HOW WILL IT BENEFIT CUSTOMERS?:
Why in the news?
- RBI instructs NPCI to consider Paytm’s request to operate as a Third-Party Application Provider (TPAP) for continued Unified Payments Interface (UPI) functionality.
- TPAP status is essential for providing UPI-based payment services to customers.
source:fintra
What is TPAP?
- TPAP refers to an entity offering UPI-compliant apps to end-users for facilitating UPI-based payment transactions.
- NPCI may certify 4-5 banks as PSP banks to diversify UPI system risks, ensuring multiple payment app providers participate through a multi-bank model.
Impact of TPAP Approval for Paytm:
- TPAP approval is crucial for Paytm to sustain UPI-based payment services.
- If approved, Paytm’s UPI handles will transition seamlessly to new banks to avoid disruption, per RBI’s instructions.
| What is NPCI?
● NPCI is an umbrella organization overseeing retail payments and settlement systems in India. ● Established under the Payment and Settlement Systems Act, 2007, it operates as a “Not for Profit” Company. ● Initially backed by ten core promoter banks, its shareholding expanded in 2016 to include 56 member banks representing various sectors.
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