Paytm has announced that it will no longer use third-party payment orchestration platforms, including Juspay, as it transitions to direct transaction processing. This action is in line with a growing trend in the fintech industry, where businesses like Cashfree Payments, PhonePe, and Razorpay have shifted away from intermediary platforms in an effort to improve transaction control and streamline operations.
Paytm notified retailers that starting April 1, 2025, Paytm Payments Services Limited (PPSL) will be the only method used to process all transactions. To prevent interruptions, the company advised companies to move to direct processing prior to the deadline.
"Providing a smooth and efficient payment experience for our merchants remains a top priority. As part of this commitment, we're improving our payment gateway infrastructure." Paytm stated in its merchant notification that PPSL will only support transactions routed directly through its platform beginning April 1, 2025, and will no longer process payments via Juspay.
PG firms, which are looking to expand offerings amid declining commissions, believe Juspay's payment routing engine gives the firm undue influence in deciding which PG merchants should use.
Juspay announced on March 24 that it has open-sourced its payments routing engine, Hyperswitch, as part of its larger open-source initiative. However, PGs claim that Juspay's routing engine isn't transparent enough.
Interestingly, Juspay also has a payment aggregator license from the regulator, and the PG firms are concerned that the payment processing firm will try to poach their customers. Juspay is also in talks with investors about a $150 million round, which could boost the company's overall payments business and threaten its competitors.
