Paytm has finally received approval from India’s central bank to operate as a payment services provider for online merchants, following months of scrutiny. The approval allows Paytm to offer a range of payment methods, including UPI, lifting restrictions imposed in 2022. This comes after a Chinese investor sold its stake in Paytm.

The Reserve Bank of India granted Paytm’s Payment Services unit “in-principle” approval to operate as an online payment aggregator, over two years after initially being denied the license. Paytm was previously barred from onboarding new online merchants, but can now operate as a service provider for online merchants.

Paytm’s recent approval as a payment services provider comes over a year after the RBI banned Paytm Payments Bank from accepting fresh deposits and enabling credit transactions. Paytm quickly partnered with several banks to continue offering payment services, adapting to regulatory challenges.

Paytm’s new license as a payment services provider enables the company to control its value chain, reducing reliance on bank partners. Paytm is currently the third most-used UPI payments platform in India, processing a significant volume of transactions and value compared to competitors.

Despite trailing behind PhonePe and Google Pay in the UPI market, Paytm offers a broad suite of services to attract consumers and merchants, including offline merchant payment solutions and a growing credit and lending business. Paytm’s recent financial results show a turnaround from losses to net income.

Read more at Yahoo Finance: Indian fintech Paytm wins a major regulatory battle days after key investor exit