The Reserve Bank of India (RBI) has granted in-principle approval to 32 payment aggregators, including Amazon Pay and Google Pay, to continue their operations in the country. The RBI had earlier issued guidelines on the regulation of payment aggregators and payment gateways, according to which all payment gateways needed to obtain a license to acquire merchants and offer them payment services. The eligibility criteria for payment aggregators include a minimum net worth criterion of Rs 15 crore by March 31, 2021, and Rs 25 crore by the end of the ongoing fiscal year (FY23), as per RBI rules.
Entities Granted In-Principle Approval
Amazon (Pay) India Pvt Ltd, Google India Digital Services Pvt Ltd, Reliance Payment Solutions Ltd, and Zomato Payments Pvt Ltd are among the notable entities whose names are present in the list published by the RBI. These are among the existing payment aggregators who have been granted in-principle approval to continue their operations. However, Paytm Payments Services and PayU Payments Private Limited are the entities whose application to continue as payment aggregators has been returned by the RBI.
Applications Under Process
Furthermore, applications of 18 existing payment aggregators, including that of Bhartipay Services Private Limited, are under process, the RBI said. As per news agency IANS, payment aggregators whose applications have been returned are allowed to apply within 120 days from the date of return. They can continue their business subject to the condition that no new merchants should be onboard by them until advised otherwise.
Stakeholders Advised to Transact with Authorized Entities
"All stakeholders are advised to transact with only those existing payment aggregators who have been granted in-principle authorization or whose application is currently under process. Stakeholders may transact with new payment aggregators only after these entities have received ‘authorization’ under Section 7 of the PSS Act from the RBI," the apex bank said.
Implications for Fintechs
Over 185 fintechs, including Cred, Razorpay, Paytm, and PhonePe, had submitted proposals for the license. The extension given to existing payment aggregators to submit their applications under the Payment and Settlement Systems Act, 2007 (PSS Act) was until September 30, 2022. The RBI's decision to grant in-principle approval to some payment aggregators and return applications of others will impact the operations of fintechs in the country.
The RBI's decision to grant in-principle approval to 32 payment aggregators, including Amazon Pay and Google Pay, is a significant development for the fintech industry in India. It is important for stakeholders to transact with authorized entities to ensure that they comply with the guidelines issued by the RBI. The eligibility criteria for payment aggregators under the RBI rules include a minimum net worth criterion, which indicates that the regulator is committed to ensuring the financial stability of these entities. The decision will also impact the operations of fintechs in the country, and it will be interesting to see how they respond to these developments.
