Paytm enables stock purchases through blocked funds

Mumbai: Paytm has introduced UPI Trading Blocks to streamline online and app-based equity trading. The feature allows investors to block funds directly in their bank accounts, eliminating the need to transfer large sums to brokerage platforms. Although blocked, funds remain in the customer's bank account and continue to accrue interest until an order to buy shares is executed, at which point the brokerage app automatically deducts the required amount. The system promises greater efficiency and security, reducing the risk of misuse while offering traders a more seamless experience.
SEBI mandated UPI trading blocks for qualified stock brokers from Feb 1, 2025, after launching it in beta on Jan 1, 2024, as an optional feature. This mechanism allows investors to block funds in their bank accounts for trading, with amounts debited only upon trade execution and T+1 settlement for payouts. Investors continue to earn interest on blocked funds, reducing the risk of misuse by the brokerage. NPCI facilitates this through UPI apps like BHIM, Groww, and YES PAY NEXT, with banks such as HDFC, ICICI, Axis, and Yes Bank participating. Stockbrokers, including Zerodha, are in certification stage.
Paytm’s UPI Trading Blocks, built on NPCI’s infrastructure, deducts payments automatically without requiring a UPI PIN, ensuring transparency and security. Currently available for UPI handles of Axis Bank (@ptaxis) and Yes Bank (@ptyes), the feature will soon extend to SBI (@ptsbi) and HDFC Bank (@pthdfc). A Paytm spokesperson said, “We are thrilled to introduce UPI Trading Blocks on Paytm UPI, bringing greater convenience to stock traders.”
The company recently launched the Receive Money QR Widget for Android and iOS users, allowing shopkeepers, freelancers, and small businesses to accept payments without opening the app. It also introduced a coin-drop sound for real-time payment notifications. Expanding its payment ecosystem, Paytm offers UPI Lite for small-value transactions, RuPay credit card linking on UPI, and an auto-pay service. It now supports international UPI payments in the UAE, Singapore, France, Mauritius, Bhutan, Sri Lanka, and Nepal.