Paytm Ends Partnership with Juspay, Partners with Razorpay, Cashfree, and PhonePe for Direct Payment Processing

Paytm has decided to discontinue its association with third-party payment orchestration platforms, including Juspay, in a significant shift toward direct transaction processing. This move aligns with a broader industry trend where fintech giants like Razorpay, PhonePe, and Cashfree Payments have also moved away from intermediaries.

Transition to Direct Payment Processing

In a notification sent to merchants, Paytm announced that from April 1, 2025, it will only process transactions routed directly through Paytm Payments Services Limited (PPSL). The company urged businesses to transition before the deadline to avoid service disruptions.

The notification read: "Thank you for choosing PPSL as your preferred payments partner. It is our constant endeavour to provide our merchants with leading payment solutions. To uphold this commitment and provide a more streamlined experience, we have further enhanced our payment gateway experiences. As part of this advancement, effective April 1, 2025, PPSL will be facilitating transactions which are routed directly to PPSL and will no longer facilitate transactions routed via Juspay."

Understanding Juspay's Role in Payment Processing

Juspay acts as a payment orchestration platform, helping businesses integrate with multiple payment gateways. It provides services such as card tokenisation, user interface enhancements, and optimised payment routing to improve success rates. By leveraging Juspay’s payment routing engine, merchants can ensure that transactions are processed through the most efficient payment gateway.

However, PG firms believe that Juspay's payment routing engine gives it undue influence over which payment gateway a merchant should use. As payment gateway companies look to expand offerings amid shrinking commissions, they are increasingly wary of third-party platforms controlling transaction routing.

Juspay's Open-Source Initiative and Industry Concerns

On March 24, Juspay announced the open-sourcing of its payments routing engine, Hyperswitch, as part of a broader initiative. Despite this move, many PG firms claim that Juspay’s routing engine lacks transparency.

Another concern is that Juspay holds a payment aggregator license from regulatory authorities. Some PG firms fear that Juspay may leverage this license to acquire customers directly, thereby posing a competitive threat. The company is also in discussions with investors for a $150 million funding round, which could further strengthen its position in the payments industry.

How Payment Orchestration Platforms Work

Payment orchestration platforms like Juspay serve as intermediaries between merchants and multiple payment gateways. They streamline payment operations by offering features such as:

• Multi-payment gateway routing

• Transaction optimisation

• Failover mechanisms to ensure seamless processing

These platforms are particularly beneficial for businesses operating at scale, as they simplify payment management and reduce reliance on a single payment gateway provider.

Impact on Businesses and Industry Trends

The shift away from payment orchestration platforms signifies a growing preference for direct integrations among major fintech players. By eliminating third-party platforms, companies like Paytm aim to:

• Gain greater control over transaction processing

• Improve operational efficiency

• Enhance payment success rates

• Reduce dependency on intermediaries

This transition reflects a broader trend in the fintech industry, where companies seek to streamline operations and offer merchants a more seamless experience. As direct payment processing gains momentum, payment orchestration platforms may need to reassess their business models to stay relevant in a changing landscape.

About Paytm

Paytm is one of India’s leading mobile payments and financial services companies. It pioneered the QR-based mobile payment revolution in India and continues to develop technologies that support small businesses in payments and commerce. The company's mission is to integrate half a billion Indians into the mainstream economy through cutting-edge digital payment solutions.

Conclusion

With Paytm's decision to move away from Juspay and similar platforms, the payments ecosystem in India is undergoing a transformation. The growing shift toward direct payment processing highlights the evolving needs of fintech firms in an increasingly competitive market. As Paytm, Razorpay, PhonePe, and Cashfree Payments continue to embrace direct integrations, payment orchestration platforms may need to innovate further to sustain their relevance in the industry.