Latest Payments News: Indian Government Teams Up With Paytm On Fintech Growth, and more

Catch up on some of the stories our payments compliance analysts have covered lately, and stay up-to-date on the latest news.

Indian Government Teams Up With Paytm On Fintech Growth

India’s Department for Promotion of Industry and Internal Trade (DPIIT) has signed a memorandum of understanding with Indian fintech giant Paytm in a bid to bolster innovation and scale start-ups in the fintech and manufacturing sectors.

Paytm, operated by One97 Communications Limited, is one of India’s leading digital payments and financial services platforms.

Under the partnership, the company will offer mentorship, funding opportunities, infrastructure support and market access to startups, particularly those involved in manufacturing fintech hardware such as payment terminals and soundboxes.

The initiative will also provide regulatory guidance through workshops in collaboration with industry and government bodies, helping startups navigate compliance challenges.

Through its Paytm for Startups programme, the company will connect entrepreneurs with investors and incubation initiatives, while its CSR arm, Paytm Foundation, will support deep-tech ventures in areas such as climate tech.

Shri Sanjiv, joint secretary of DPIIT, welcomed the move. “This partnership with Paytm marks a crucial step in strengthening India’s startup ecosystem,” he said.

“By leveraging Paytm’s fintech expertise and infrastructure, we aim to support entrepreneurs in overcoming challenges, scaling their ventures, and contributing to India’s emergence as a global innovation hub.”

Hong Kong Tightens Name-Check Rules For Instant Payments

The Hong Kong Monetary Authority (HKMA) has introduced stricter name-matching rules for real-time fund transfers, otherwise known as instant payments, with the aim of enhancing security.

The new rules, announced in a circular, will require stricter name-matching protocols for Faster Payment System (FPS) transactions and similar intra-bank transfers.

They are in line with efforts underway in jurisdictions such as the UK, EU, Australia and New Zealand, and are intended to minimise erroneous payments and reduce fraud risks.

The HKMA has set a deadline of May 31, 2025 for full implementation of the measures, which will replace previous directives issued in 2021, and financial institutions are expected to update their systems and inform customers accordingly.

Under the updated guidelines, payment service providers (PSPs) will need to implement a mandatory name-matching process for all applicable fund transfers, regardless of transaction amount.

Institutions may set a threshold for this verification, although it must not exceed HK$1,000 ($128). Previously, name-matching was required only for transactions of HK$10,000 or above.

The HKMA's decision follows concerns that fraudsters have been bypassing existing safeguards by keeping transactions below the previous threshold.

“It has come to the attention of the HKMA that some scammers pretended to be reputable merchants and deceived customers into making real-time fund transfers below HK$10,000 to evade the name matching process,” the regulator said in the circular.

By expanding the scope of name verification, the regulatory body aims to bolster consumer protection and prevent financial scams.

In addition to implementing the mandatory name-matching process, institutions must notify customers when name-matching is not applied to transactions below the threshold.

They must also improve their communication efforts to increase awareness of the new verification measures.

UK Payments Regulator Faces Abolition In Government Overhaul

Media reports suggest that the UK’s Payment Systems Regulator (PSR) could be axed as part of the government’s regulatory cull.

The PSR, which came into existence in 2015, could be scrapped and folded into the Financial Conduct Authority (FCA) as part of the UK government’s drive to cut red tape, media outlets such as the Financial Times and Sky News have said.

As covered by Vixio, the UK payments regulator announced in November that it is recruiting a new managing director who will also serve as the FCA’s executive director for payments and digital assets in a permanent dual role.

Rumours that the PSR might be scrapped have circulated for months, and the idea was previously touted by former Prime Minister Liz Truss.

Ministers and officials are now reportedly actively considering the move, with a decision expected within weeks.

If confirmed, it would be part of a wider shake-up of Britain’s economic regulators under the new Labour government, which wants economic growth.

The review follows last month’s dismissal of Competition and Markets Authority (CMA) chair Marcus Bokkerink, amid concerns that the regulator was not prioritising UK competitiveness.

UK And EU Tighten Sanctions On Russia's Financial Networks

Three years after Russia’s full-scale invasion of Ukraine, the UK and EU have introduced sweeping new sanctions aimed at further isolating Moscow’s financial system.

The EU’s 16th sanctions package includes a transaction ban on foreign banks using Russia’s System for Transfer of Financial Messages (SPFS), an alternative to Swift designed to bypass Western restrictions.

Additionally, 13 key Russian regional banks have been cut off from specialised financial messaging services, increasing economic pressure on the Kremlin, and the package also sanctions 83 individuals and entities linked to Russia’s war effort.

Meanwhile, the UK has announced its largest sanctions package against Russia since 2022, imposing over 100 new restrictions.

For the first time, the UK is using new powers to sanction foreign financial institutions supporting Russia’s war machine, including Kyrgyzstan-based OJSC Keremet Bank.

“For three years now, Russia has relentlessly bombed Ukraine, attempting to steal land that isn’t theirs to take,” said Kaja Kallas, the EU’s high representative for foreign affairs and security policy.

The former Estonian Prime Minister added that “every sanction package deprives the Kremlin of funds to wage war”.

“With talks underway to end Russia’s aggression, we must put Ukraine in the strongest possible position,” she said. “Sanctions provide leverage.”

ECB Expands Wholesale CBDC Work

The European Central Bank (ECB) has announced an expansion of its initiative to settle distributed ledger technology (DLT)-based transactions in central bank money.

The scheme would be a wholesale counterpart to its retail central bank digital currency (CBDC) project.

The bank’s move is part of a broader effort to modernise market infrastructures while improving the safety and efficiency of existing payment systems.

“We are embracing innovation without compromising on safety and stability,” said ECB executive board member Piero Cipollone, who oversees both the wholesale initiative and retail CBDC work with the digital euro.

“This is an important contribution to enhancing European financial market efficiency through innovation. Our approach will pay due attention to the Eurosystem’s goal of achieving a more harmonised and integrated European financial ecosystem.”

The initiative will follow a two-track approach. In the short term, the Eurosystem will develop an interoperability link between DLT platforms and its existing TARGET services, with a timeline for implementation being announced soon.

In the long term, the ECB will explore a fully integrated solution for DLT-based settlements, including international transactions such as foreign exchange settlements.

This expansion builds on trials conducted in 2024, involving 64 participants, which included central banks such as Germany’s Bundesbank and the Bank of Lithuania and financial institutions such as Deutsche Bank and BNP Paribas.

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