What Happened to Paytm and How You Can Still Use It

Paytm was launched in 2010 by Vijay Shekhar Sharma, with the goal of making digital payments easy and accessible to the masses. It quickly gained popularity and became one of the leading digital payment platforms in India.

By 2017, Paytm had already processed over 7 billion transactions, with a growth rate of 300% year-over-year. This rapid expansion was largely driven by the government's demonetization move, which forced people to switch to digital payments.

Despite its success, Paytm's growth was not without its challenges. In 2019, the company faced a significant setback when it was fined ₹643 crore by the Reserve Bank of India (RBI) for non-compliance with Know Your Customer (KYC) norms.

The RBI's directive on payment banks has been a major concern for Paytm.

The RBI is considering cancelling the operating license of Paytm Payments Bank.

RBI issued a directive against Paytm Payments Bank for violations including misuse of customer documentation rules.

Non-disclosure of material transactions is another issue that has raised money laundering concerns.

Thousands of Paytm bank users have not yet submitted their KYC documents, according to the RBI.

After February 29, Paytm Payments Bank will bar customers from replenishing their savings accounts or the popular digital payment wallet.

The RBI has not issued a final decision regarding the matter yet.

Paytm's share price plummeted to a record low of ₹395.50 apiece on the BSE after a 9.77 percent fall in early trade.

The company's parent, One 97 Communications, saw over 68 lakh equity shares change hands at an average price of ₹394 per share on the stock exchanges, worth ₹269.4 crore.

This massive sell-off eroded market capitalisation by ₹17,378.41 crore in two days.

Paytm anticipates an annual operational profit impact of ₹300-500 crore due to the RBI crackdown.

The stock was trading 56 percent away from its 52-week high and almost 80 percent below its IPO price of ₹2,150 on February 5.

Warren Buffett's Berkshire Hathaway exited Paytm in an open market transaction last year, selling its residual 2.46 percent stake for ₹1,371 crore.

Berkshire Hathaway made a total of ₹1,672.7 crore from its investment in Paytm, essentially booking a loss of about ₹507 crore.

Paytm's founder-CEO reassured users about the app's functionality beyond February 29, emphasizing the company's dedication to serving the nation.

The company continues ongoing discussions with the RBI to comply with directives and operates with the highest ethical standards.

Paytm said that users need not take additional actions for its UPI service to operate without disruption, as the company is collaborating with other banks to implement backend changes.

Users can shift to other wallets, services such as loan distribution, insurance, and equity broking are deemed unaffected, and Paytm's offline merchant offerings will continue as usual.

Paytm assured users that their UPI service will operate without disruption, and they can continue to use existing balances in their wallets, FASTags, and NCMC accounts.

Customers can use their Paytm Wallet balances until exhausted after February 29, with no option to add funds, and the same restriction applies to PPBL accounts, FASTags, and other linked services.

With over 20 banks and non-banking entities providing wallet services, users can explore alternatives such as Mobikwik, PhonePe, SBI, ICICI Bank, HDFC, and Amazon Pay.

Paytm's founder-CEO reassured users about the app's functionality beyond February 29. He appreciated the support and commitment of Paytm users, emphasizing the company's dedication to serving the nation in full compliance with a focus on payment innovation and financial inclusion.

The company continues ongoing discussions with the RBI to comply with directives. Paytm said they operate with the highest ethical standards.

The company rejected reports of investigation or violation of foreign exchange rules by the company or its associate PPBL. They termed the recent media reports as entirely misleading, baseless, and malicious.

Paytm clarified that they are not the subject of an investigation regarding money laundering. They also denied any investigation by the ED on OCL, their associates, and management.

The company reiterated that they and their associate Paytm Payments Bank Limited are not the subject matter of any investigation. They stated that such media reports are entirely misleading, baseless, and malicious, which harm the interests of all their stakeholders.

Paytm's UPI service will operate without disruption, thanks to collaborations with other banks to implement backend changes.

Users can continue to use their existing balances in their savings accounts, wallets, FASTags, and NCMC accounts without any issues.

You can use your Paytm Wallet balances until they're exhausted after February 29, but you won't be able to add funds after that date.

Withdrawals and transactions are permitted without restrictions, so you can still use your linked services as usual.

If you're looking for alternatives, there are over 20 banks and non-banking entities providing wallet services, including Mobikwik, PhonePe, and SBI.

You can also explore FASTag services offered by 37 banks, including popular choices like SBI, HDFC, ICICI, and Airtel Payments Bank.

Customers can shift to other wallets if needed, but services like loan distribution, insurance, and equity broking remain unaffected.