Paytm's New User Sign-Ups on Hold Due to Migration
Market Share Decline: Paytm's hold on the UPI market has slipped from 12% in January to 9% in March. This decline is partly due to their inability to onboard new users.
Migration Hurdle: As per RBI regulations, Paytm must migrate existing users to new UPI handles before signing up new ones. This migration process from Paytm Payments Bank to partner banks is expected to take another two months.
RBI Restrictions: Following RBI sanctions on Paytm Payments Bank, the company transitioned to a third-party app provider (TPAP) model, partnering with Yes Bank, Axis Bank, HDFC Bank, and SBI.
Impact on Ecosystem: Paytm's inability to onboard new users benefits competitors like PhonePe and Google Pay, potentially creating a duopoly in the UPI space.
Looking Ahead: While the migration process restricts new user sign-ups, Paytm's merchant base remains unaffected. A smooth and swift migration is crucial for Paytm to regain its footing and maintain a healthy UPI ecosystem.