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Paytm says it is the go-to banker for Indian merchants

Paytm is the third largest UPI (Unified Payments Interface) player but unlike the market leaders, it has a banking license. This has given the firm a competitive advantage over its competition in terms of smoother processing of transactions and lower failure rates. This is why merchants are happy to move to a Paytm account and abandon their traditional bank account, the company said in a series of blog posts last week.

A few years ago Paytm was the dominant e-wallet player, but UPI killed this moat. So it went and got a payments bank license, something that its biggest competitors do not. As a result, Paytm’s systems directly interact with the National Payments Corporation of India (NPCI) rather than through anchor banks who act as intermediaries between the third-party app and the NPCI. As a result, Paytm has one of the lowest technical decline rates amongst the banks.

The company said that it has become the largest enabler of digital payments in the country driven by merchant payments and increased adoption across small cities and towns. “Both customers and merchants who have been riddled with pending and failed payment issues with other banks are increasingly preferring to use Paytm Payments Bank for sending and receiving money via UPI given its overall faster payment experience and lower technical failures,” it said.

“With every passing month, we are seeing more and more people using us to scan the UPI QR-codes or using Paytm UPI to make payments, making us the most trusted bank for UPI payments. We are providing the fastest and most seamless UPI payments service and our success can be gauged from the monthly NPCI data that shows us as the top beneficiary bank with the highest success rate,” said Satish Gupta, managing director and chief executive officer, Paytm Payments Bank Ltd in a blog post “We will continue to empower more merchants across the country to join the digital payment ecosystem and benefit from our innovative and personalised offerings,” he said.

The bank has now amassed over Rs 3,200 crore in deposits across 64 million accounts. It has 20 million merchants on its network, and around 85% of its wallet transactions take place at these merchant outlets.

According to Forbes India, Paytm has provided loans to 126,000 of its merchants as of March this year, and plans to scale this side of the business to 1 million merchants in 2 years. The average size of the merchant loans stood at Rs 1 lakh repayable over a 12 month period. Since Paytm’s payment bank license restricts from providing loans to customers directly on its balance sheet, it has partnered with various lenders.

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Key Highlights

Paytm Payments Bank

  • 64 million accounts, with Rs 3,200 crore in deposit
  • Opened 1 million savings and current accounts in a month
  • In March 2021, PPBL processed over 975 million digital payments transactions

Paytm Wallet

  • 325 million wallet accounts
  • Over 78% of wallet users transact on a daily basis
  • 85% of wallet transactions are merchant transactions across online platforms and kirana stores

Unified Payments Interface

  • 100 million UPI handles on its platform
  • Processed 471 million transactions worth Rs 43,221 crore in March 2021
  • Processed 340 million transactions worth Rs 38,490 crore in February 2021
  • Technical Decline rate at 0.01% in April 2021 compared to 0.03% as a beneficiary bank in March 2021
  • Technical Decline rate  at 0.01% in April 2021 compared at 0.05% as a  remitter banks in March 2021


  • Issued 9 million FASTags
  • 42 million monthly issuer transactions
  • Acquired 270 toll plazas
  • 57 million monthly acquirer transactions

“Paytm Payment Bank’s FASTag has become India’s most preferred instrument for digital toll payments as we allow our users to directly pay from their Paytm Wallet. It has gained immense popularity amongst vehicle owners including commercial transport due to its seamless onboarding and integration process which requires minimum documentation, instant activation, and unmatched customer care support,” the company said in a blog post.

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