Paytm (One97 Communications Limited), India's leading digital payments company, has announced the transfer of its offline merchant payments business to its subsidiary, Paytm Services Limited (PPSL). This move is to comply with the Payment Aggregator Regulations issued by the Reserve Bank of India (RBI).

Restructuring in accordance with RBI directives
Paytm stated in a stock exchange filing that this move is to consolidate the company's online and offline merchant payments businesses. PPSL has already received in-principle approval from the RBI to operate its payment aggregator (online) business. This will allow all of the company's payment aggregation operations to be managed under a single regulated entity, enhancing both efficiency and synergy.

Which services will be transferred?
This transfer by Paytm 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. Once the transaction is approved, the board and shareholders of PPSL will proceed with it. The company clarified that this transfer is being made to a subsidiary and will not impact the company's consolidated financial results.

Compliance with RBI Directives
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-regulated standards, thereby ensuring better operational efficiency in the future," the company said in a statement.

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

Company's Financial Performance
In FY 2024-25, Paytm's offline merchant payments business generated revenue of approximately ₹2,580 crore, 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.

Transfer to be Completed by December 2025
The company expects to complete the transfer 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.

Why is this move important?
Paytm's move is a significant initiative towards making India's payments ecosystem more regulated, transparent, and streamlined. 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.

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