Paytm approves transfer of offline merchant payments business to wholly-owned subsidiary

One 97 Communications (Paytm) has approved the transfer of its offline merchant payments business to its wholly-owned subsidiary, Paytm Payments Services (PPSL), to comply with the Reserve Bank of India’s (RBI) updated regulations on payment aggregators.The company’s board approved the move in a meeting held on Wednesday (October 15), subject to execution of definitive agreements, receipt of necessary approvals from PPSL’s board, and shareholder consent.

The transfer will consolidate Paytm’s online and offline merchant payment operations under PPSL, which has received in-principle approval from the RBI to operate as a Payment Aggregator Online (PAO).

The offline business being transferred includes merchants serviced through QR codes, soundbox devices, and EDC machines. Paytm will implement the transfer as a slump sale on a going-concern basis, ensuring operational continuity.As the transaction involves a wholly-owned subsidiary, it will not affect the company’s consolidated financials.

For the financial year 2024-25, the offline merchant payments business generated approximately ₹2,580 crore in revenue, accounting for 47% of the company’s standalone revenue, with a net worth of around ₹960 crore, or 7.45% of Paytm’s standalone net worth.

The slump sale is expected to be completed on or before December 31, with Paytm receiving a lump-sum cash consideration based on the book value of the transferred assets and liabilities.

The company emphasised that the transaction is an internal restructuring aimed at consolidating payment aggregation activities within a single regulated entity to enhance operational efficiency and synergy. There will be no change in the ultimate ownership or control of the business.