The Reserve Bank of India (RBI) on Wednesday granted in-principle approval to as many as 32 entities to operate as an online payment aggregator (PA). Shortlisted firms include the likes of Amazon (Pay) India, Google India, and Pine Labs, among others. The complete list is available here.
Apart from the 32 entities that were already operating as payment aggregators, the RBI has also granted in-principle authorisation to 19 new entities (Ps. Who was not payment aggregator before). This includes JusPay, Zoho Payment Technologies, Mswipe, and Tata Payments Limited. But, these 19 entities cannot operate till further notice, as per the RBI guidelines.
A payment aggregator license enables firms to process large numbers of payments in terms of being involved in settling payments.
According to RBI guidelines, existing non-banking PAs as on March 17 2020 were required to apply for a payment aggregator license with RBI by September 30, 2021, to seek authorisation under the Payment and Settlement Systems Act, 2007 (PSS Act). Keeping in view the disruption caused by the COVID-19 pandemic, RBI extended the deadline to September 30, 2022.
The central bank also published a list of existing PAs whose applications for license are under review. These entities include PhonePe, Instamojo Technologies, and Bhartipay Services, among others.
The RBI said that Freecharge, Paytm, PayU, and Tapits – whose application were returned – are permitted to apply for the license within 120 days from the return. However, these firms cannot add new merchants until “advised otherwise.”
RBI further said that applications of as many as 17 entities (existing PAs) and 35 (new PAs) were either withdrawn or returned, and are “advised to stop online payment aggregation activity and close nodal/escrow account(s) within a period of 180 days from the date of return of application.” Some of the names in this list include Ezetap, Flexmoney, Ola Financial Services, Rupifi, Khatabook and others.
“While the exercise of scrutiny of applications of PAs is an ongoing process, for the purpose of disseminating information and ensuring greater transparency, the list of entities who have submitted application to RBI seeking authorisation to act as online PAs under the PSS Act along with the current status of their application as on February 15, 2023 is published, which will be updated on a fortnightly basis,” the RBI said in a press release.
The central bank hopes the license rules will bring the online payment aggregation business in the country within the regulatory fold.
The latest move follows RBI’s series of sweeping changes in the recent past.
For instance, it made it compulsory to have an additional verification of online card payments; set limits on auto-renewing payments, requiring merchants around the world to comply with a dashboard system for recurring charges to be able to serve Indian customers.
Earlier, it had also briefly banned banks from issuing Mastercard cards for around a year for failing to localize its Indian users’ data within servers located in the country.