One97 Communications has applied for a Prepaid Payment Instrument (PPI) licence from the Reserve Bank of India (RBI) to revive its wallet business operations. According to reports from Business Standard, this application comes after the RBI's cancellation of Paytm Payments Bank's licence in April 2026, which had effectively halted the company's wallet services. A PPI licence would enable Paytm to issue digital wallets and other prepaid payment products directly under its own entity, allowing customers to load money and use for payments, shopping, and transfers within the regulatory framework.
The Reserve Bank of India has unveiled PPI Discoverability on UPI, a groundbreaking initiative that enables Prepaid Payment Instruments (PPI) integration with Third-Party Application Providers (TPAPs). This revolutionary feature allows PPI users to link their wallets and cards to any UPI applications, creating a unified payment experience that bridges the gap between PPI wallets and UPI. As reported by M2P Fintech, PPI users no longer need to juggle between apps and accounts, instead enjoying seamless payments while safeguarding funds even during service disruptions. This interoperability empowers customers to maintain wallet funds for seamless payments, reducing the need for frequent debits from bank savings accounts.
The RBI cancelled Paytm Payments Bank's licence in April 2026, citing continued breaches of licensing conditions and regulatory requirements. As reported by Business Standard, the regulator confirmed that the bank had sufficient liquidity to repay depositors during the winding-up process. Following this regulatory action, Paytm shifted its focus to ensuring uninterrupted UPI payments by partnering with other banks, while the absence of a wallet business left a gap in the company's payments ecosystem. The introduction of UPI Discoverability now provides a regulatory framework for PPI wallet integration that was previously unavailable.
If the RBI grants the PPI licence, Paytm could relaunch its digital wallet services, offer customers another payment option alongside UPI, increase user engagement within its app, and strengthen its merchant payment ecosystem. According to Moneycontrol reports cited by Business Standard, the approval would help Paytm rebuild a business segment that was once central to its digital payments strategy. The integration of PPI with TPAPs is set to augment digital payment adoption, particularly for small-value transactions, while the unified UPI experience enhances financial inclusion across the nation.
Until the RBI decides on the PPI licence application, Paytm will continue operating its existing UPI-based payment services through partner banks. As reported by Business Standard, the company had largely halted its wallet business after regulatory action against Paytm Payments Bank, though it continued to offer UPI services through banking partnerships. The introduction of UPI Discoverability creates new opportunities for PPI wallet integration, with companies like M2P Fintech positioned as NPCI-affiliated partners to enable this transformation. This regulatory development positions India's digital payment landscape for enhanced interoperability and user experience across multiple payment platforms.
