Paytm has just been licensed by the Reserve Bank of India (RBI) to operate as an online payment service provider for traders, marking a major breakthrough in regulations after many months of strict supervision. The announcement came just days after China's Ant Group sold all of its remaining 5.8% of shares in parent company One97 Communications, worth $454 million.
The new license allows Paytm to receive new online traders and provide many payment methods such as cards, online banking and Unified Payment Interface (UPI). This is a big change compared to 2022, when the company was refused a license due to regulations on receiving investment from countries with common borders. In 2023, RBI also limited Paytm Payments Bank's operations, forcing the company to cooperate with many major banks such as Axis, HDFC, SBI and Yes Bank to maintain the service.
According to the RBI, Paytm will have to complete system audit, cybersecurity assessment and report within 6 months, otherwise the license will lose its validity.
Paytm is currently the 3rd largest UPI platform in India, after PhonePe and Google Pay, handling 1.27 billion transactions in June, equivalent to 6.9% of total transactions. In addition to online payment, the company also sells hardware, software to support online payment, and credit and lending services.
At the end of the first quarter of fiscal year 2026, Paytm recorded a net profit of 1.23 billion rupees ($14 million), reversing compared to the same period last year, with revenue increasing by 28% to $224 million and profit margin reaching 60%. The companys stock has gained 13.25% since the start of the year, closing at 1,118.50 rupees ($132) just before approval was released.
