Paytm enables automatic payment deduction from bank accounts for equity trading

Paytm, operated by One 97 Communications, on Tuesday announced that it would allow brokerage applications to block funds directly in bank accounts through its Unified Payments Interface (UPI) service.

In an exchange filing, the company said Paytm UPI now supports UPI Trading Blocks, a feature that aims to simplify the trading process. Users can now set up automatic payment deductions directly from their bank accounts.

This negates the need for users to transfer funds to trading accounts on brokerage apps. The money remains in the bank account earning interest while being accessible for immediate trades.

Built on the infrastructure of the National Payments Corporation of India (NPCI), the app deducts the amount only when the money is needed, automatically, without need of a UPI pin.

Once the trade is completed, users can manage and track their funds on the Paytm app.

The fintech recently suffered a blow when it received a show cause notice from the Directorate of Enforcement (ED). The notice was for alleged violations of certain Foreign Exchange Management Act (Fema) provisions involving the company and two subsidiaries, amounting to Rs 611 crore.