The Reserve Bank of India has been sparing with payment aggregator and payment gateway licenses, and the apex bank has granted initial approval only to players whose core business is payments, like Razorpay, Pine Labs and Stripe. Now, the State Bank Of India-backed firm Cashfree Payments is the latest player to get an in-principle approval for a payment aggregator (PA) license, according to three sources who spoke to Entrackr.
“RBI has granted PA license to Cashfree early this month,” said one of the sources requesting anonymity, referring to the in-principle approval. “A formal announcement by the company will be made in the next month or so.” A central bank audit will follow for the coming months, after which the bank will make a final decision on granting the license to the company.
The approval brings relief for the company, as its application had been pending for a long time, leading to speculation on whether it would receive approval. A payment aggregator license allows firms to process large numbers of payments and also be involved in settling payments. PA/PG platforms have been offering payment aggregation, but the RBI in 2020 asked them to apply for a license.
“Cashfree also received a prepaid payment instrument license from the RBI,” the source told us. While the company doesn’t run any consumer centric payment businesses, it’s now authorized to store users’ money in prepaid wallets, as Paytm and Mobikwik do.
Cashfree and RBI didn’t respond to requests for comment. We will update the story in case they respond.
The RBI rejected over 100 applications for PA as many firms were engaged in cryptocurrency trading, betting, gambling and didn’t meet its criteria of Rs 15 crore net worth. MobiKwik-owned Zaakpay is apparently facing rejection because it had an inadequate net worth.
According to sources, RBI is only considering entities which have payments as a core part of their business in the licensing process. Online food ordering platform Swiggy, Zomato and GPay’s applications are likely to face rejections.
As of now, Pine Labs, Razorpay, Stripe and 1Pay Mobileware are the only companies to get approval for PA/PG license officially. The central banking agency is expected to release the names of selected entities soon.