Paytm Asks Merchants To Snap Ties With Third Party Platforms

Wed, 26 March 2025

11:42

Fintech major Paytm has asked merchants to sever ties with third-party payment orchestration platforms, such as Juspay, according to two sources in the know.

The decision comes after other fintech players, including PhonePe, Cashfree Payments, and Razorpay, made similar moves nearly two months ago.

The notification will come into effect in April, following which all transactions will be routed through Paytm's business-to-business payments arm Paytm Payments Services (PPSL) and not through routers.

Paytm and Juspay don't have a direct relationship. Instead, merchants use Juspay's payment routing services, since they partner with multiple payment aggregators (PAs).

A senior fintech executive said, "We have understood that Paytm will also levy a one per cent additional fee on its merchants after they move away from Juspay. It indicates that companies are increasingly trying to enclose customers within themselves."

Partnering with an orchestrator allows merchants better transaction success rates since the orchestration layer routes transactions to an applicable PA, based on metrics such as downtime and transaction processing costs.

Paytm's decision aligns with other industry players and comes at a time when Juspay has open-sourced its orchestration layer to merchants of all types and sizes.

Juspay's move counters the playbook other PAs have undertaken since it allows enterprises to integrate the orchestration piece as an in-house software layer within their own stake without requiring a third-party router.

"It seems like Juspay decided to go open source after leading PAs decided to not work with merchants who engage the services of a third-party router," a second fintech executive said.

PAs believe direct integrations enable faster delivery of their latest offerings and lead to service improvements, ensuring a superior user experience. Merchants, not PAs, pay Juspay for its orchestration services.

Ajinkya Kawale, Business Standard

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