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How FASTags issued by the bank will be affected, ET Infra

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Reserve Bank of India (RBI) has barred Paytm Payments Bank from accepting deposits or top-ups in any customer account, including FASTags, after February 29, 2024. This regulatory measure comes after the comprehensive system audit report and subsequent compliance validation report conducted by external auditors.

How it affects FASTag issued by Paytm

To address users’ concerns, Paytm moved swiftly to address queries and questions related to FASTag users. The company has dropped a post on microbloggin site X that aims to dispel any misinformation surrounding FASTag functionality after the ban. The post reads, “Paytm MYTH: My FASTag will stop working! FACT: You can continue to use the existing balance on your Paytm FASTag.”

FASTag to continue working after February 29

Reassuring its users, Paytm emphasised that existing FASTag balances can be utilised without interruption. Moreover, the company has been proactive in establishing partnerships with other banks over the last two years and this collaboration is set to be accelerated. Paytm is actively working on effective solutions to ensure a seamless experience for FASTag users and commits to keeping them updated on any developments.

This means, FASTags will continue working after set date, but only when Paytm has completed the nodal transfer.

Bhavesh Gupta, President and COO at Paytm, addressed analysts on February 1, shedding light on the diverse product offerings on the Paytm app, including UPI, Wallets, FASTags, and NCMC. Despite the challenges posed by the RBI directive, Gupta affirmed the company’s commitment to providing alternatives for customers on the app, whether they are associated with Paytm’s bank or come to the app for various services.

In response to the regulatory changes, Paytm is also gearing up for the migration of merchants on its platform that accept UPI payments. Talks are underway with other banks, and the company is evaluating options to seamlessly transition existing merchants who accept UPI payments to alternative banks. This ambitious migration involves approximately 40 million merchants on UPI and requires guidance from both the NPCI and RBI, with discussions already initiated.

As Paytm navigates through the evolving regulatory landscape, the company remains dedicated to offering reliable financial solutions and ensuring a seamless experience for FASTag users. The ongoing efforts to collaborate with other banks reflect Paytm’s commitment to innovation and customer satisfaction in the face of regulatory challenges.

  • Published On Feb 6, 2024 at 07:50 AM IST

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