Exclusive: Tata Group surrenders payments licenses
31 Jul 2026, 03:59 PMThe surrender of the payments licences comes even as Tata Digital says it is sharpening its focus on financial services.
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Tata Group has exited the regulated payments business. The Reserve Bank of India has cancelled the Certificate of Authorisation issued to Tata Payments Ltd to operate as an online payment aggregator (PA), following the group's voluntary surrender of the licence.
The cancellation comes nearly a year-and-a-half after Tata Payments received the payment aggregator licence on January 1, 2024.
Tata is also the fourth entity to surrender the payment aggregator licence, after Zomato, Groww and R360 (Reward360).
Tata Payments' prepaid payment instrument (PPI) licence – popularly known as a wallet licence – is also in the process of being cancelled following its voluntary surrender. The company had received the PPI licence on July 9, 2024.
Tata Payments Ltd, a wholly owned subsidiary of Tata Digital, operates the payments business under the Tata Pay brand.
This is the second time Tata Group has surrendered its wallet licence. In 2018, Tata Tele NXTGEN Solutions Ltd (formerly MMP Mobi Wallet Payment Systems Ltd) voluntarily surrendered its PPI licence – which used to operate under the brand mRUPEE.
According to sources familiar with the matter, the Tata Group company is also evaluating the surrender of its stock broking licence. Tata Fintech Pvt Ltd, another wholly owned subsidiary of Tata Digital, currently holds the broking licence. The Head and Tale could not independently verify this information.
These developments mark significant shift for Tata Digital's financial services strategy. Tata Payments was expected to become the payments backbone for the group's digital ecosystem, powering merchant checkouts, bill payments and other payment services across Tata Neu and group companies.
Tata Digital houses several consumer businesses under the Tata Neu umbrella, including BigBasket, Tata 1mg, Croma, Tata CLiQ and Tata Pay.
The company had entered the consumer payments business much before receiving the PA licence. In 2022, Tata Payments received approval from the National Payments Corporation of India (NPCI) to operate as a third-party application provider (TPAP) on UPI and launched its payments app in partnership with ICICI Bank. Earlier this year, it shifted its UPI partnership to Axis Bank.
Under Tata Pay, the UPI TPAP is the only licence – and business – that seems to remain intact as of now. However, even the UPI payments business appears to be scaling slowly despite the company's ambitious plans, given that it serves as a low-cost customer acquisition funnel for the Tata Neu platform.
Tata Payments reported revenue of Rs 28.79 crore in FY26, up from Rs 20.44 crore a year earlier, while its net loss widened to Rs 84.95 crore from Rs 75.36 crore during the same period.
Tata Fintech, which operates the group's stock broking business, reported revenue of Rs 13.5 crore in FY25 compared with Rs 8.6 lakh in FY24. However, losses remained elevated at Rs 46.62 crore, unchanged from Rs 45.7 crore in the previous year.
The surrender of the payments licences comes even as Tata Digital says it is sharpening its focus on financial services.
In Tata Sons' FY26 annual report, the company said, “Over the past few years, Tata Digital has navigated multiple complexities across its businesses. We have made a decisive shift – refocusing Tata Neu on financial services and loyalty. In the coming year, Tata Neu will double down on financial services, aim to increase payments monthly transacting users by 10x, and expand our ecosystem across lending and insurance.”
With the payment aggregator and PPI licenses surrendered, and the stock broking business also likely to follow, Tata Digital's financial services portfolio is now centred around co-branded credit cards, insurance and investment offerings.
Among these, the Tata Neu co-branded credit card remains one of the company's biggest success stories. In its FY26 annual report, Tata Sons said the Tata Neu card has become one of India's largest co-branded credit card programmes. According to people familiar with the matter, the business continues to perform well. As of March 2025, Tata Digital, in partnership with HDFC Bank, had issued more than 2 million (20 lakh) Tata Neu credit cards.
Established in 2020, Tata Digital serves as the group's digital commerce arm, bringing together businesses spanning grocery, electronics, healthcare, fashion, travel and financial services. Tata Neu, launched in April 2022, was envisioned as the group's super app integrating these businesses under a single platform. However, the company’s super app strategy hasn’t been able to see much success.
The surrender of the PA and wallet licences suggests Tata Digital may be re-evaluating which regulated financial services businesses it wants to operate directly, even as it continues to position Tata Neu as a broader financial services platform.
The company has gone under significant restructuring under its new CEO Sajith Sivanandan – who previously served as Google Pay head. The company, since December 2025, laid off close to 250-300 people. Tata Digital’s financial services head Gaurav Hazrati has also stepped down, sources say. He served as president, financial services at Tata Digital, since last year. Prior to that, he was Tata Payments CEO. This development was first reported by Business Standard.
At a consolidated level, Tata Digital reported to Rs 35,990 crore in FY26 revenues, up from Rs 32,188 crore during previous fiscal. But the losses widened in FY26 to Rs 4,974 crore, compared with a loss of Rs 4,610 crore in the previous year, disclosures in Tata Sons’ annual report showed. Tata Sons has invested close to Rs 23,000 crore in Tata Digital, as of March 31, 2026.
Tata Digital did not respond to our queries till the time of publication.
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