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…
