Paytm Moves Offline Merchant Operations to Paytm Services Ltd for Regulatory Compliance

Paytm (One97 Communications Limited), the largest digital payments firm in India, has disclosed the transfer of its offline merchant payment business to its wholly-owned subsidiary, Paytm Services Limited (PPSL). The action is to meet the Payment Aggregator Regulations of the Reserve Bank of India (RBI).

Paytm informed the stock exchanges in a filing that this action is intended to bring the company's online and offline merchant payment businesses under one roof. PPSL already has in-principle permission from the RBI to undertake its payment aggregator (online) business. This will allow for all of the company's payment aggregation operations to be organized under one regulated entity, which will be more efficient and synergistic.

Paytm's transfer will apply to all of its offline merchants that accept payments through QR codes, soundboxes, and EDC machines. This process will be completed through a "slump sale" on a "going concern" basis. The transaction will be approved by PPSL's board and shareholders. The company clarified that this transfer is being made to a subsidiary and will not impact the company's consolidated financial results.

Paytm stated that this move was made to comply with the RBI's Master Directions on Regulation of Payment Aggregators, issued on September 15, 2025. "This transfer is being done to integrate our payment aggregation business and meet RBI's regulatory standards, thereby ensuring better operational efficiency in the future," the company said in a statement.

The transaction will be executed at book value (net asset value) as part of an internal restructuring. There will be no change in the company's ownership or control. Paytm stated that this decision will strengthen the group's business efficiency and regulatory compliance.

Paytm's offline merchant payments business generated approximately ₹2,580 crore in revenue in FY 2024-25, representing approximately 47% of the company's total standalone revenue. As of March 31, 2025, the business had a net worth of ₹960 crore, representing 7.45% of the company's total net worth.

The company expects the transfer to be completed by December 31, 2025. All necessary shareholder and board approvals will be obtained, and the process will be completed under a Business Transfer Agreement (BTA). Paytm also stated that this transaction is not part of a scheme of arrangement, but will be completed under a BTA.

Paytm's move is a significant initiative towards making India's payments ecosystem more transparent and streamlined through regulation. Bringing online and offline payments under a single regulated entity will not only create a trustworthy environment for customers and merchants but will also help the company make its services more secure and efficient.