Paytm shares surge after RBI grants payment aggregator license

[MUMBAI] Shares of One 97 Communications surged to the highest level in over three years after its unit received approval from India’s central bank to operate as an online payment aggregator.

The stock surged as much as 6 per cent in early trading on Wednesday (Aug 13) to the highest since January 2022, as the regulatory nod cleared a major overhang for the financial technology firm.

The firm’s unit Paytm Payments Service had been restricted from onboarding new online merchants in its payment gateway business since November 2022.

The license win marks a potential inflection point for the company, as bets on a turnaround gather steam and a potentially lucrative new revenue stream comes into view. Although the online payment aggregator business remains crowded, the regulatory green light positions Paytm to leverage its scale and product development capabilities, Citigroup said in a note.

Recently, Paytm reported net income of 1.2 billion rupees (S$18 million) in the quarter ended June, compared with a loss a year earlier. Payment aggregators are platforms that provide diverse payments options to customers, including merchants. BLOOMBERG