RBI approves aggregator payment service for 2nd time

The Reserve Bank of India RBI approved aggregator PA license, which provides point of sales PoS solutions and helps businesses with digital payments, said the technology has received in-principle approval from the Reserve Bank of India.

A third party is responsible for managing and processing merchants' online transactions. A PA license will allow you to develop an in-house online gateway, moving away from outsourcing transaction settlements.

Ketan Patel, chief executive officer of Razorpay, Pine Labs, Stripe, 1 Pay, and Innoviti Payments said that they would focus on expanding and reaching out to more MSMEs by offering them all the options, including PoS terminals, QR-code payments, boombox payment and even lending solutions, and even lending solutions.

Another window was opened for PAs existing as of March 2020 to apply for licenses last month. PAs should have a minimum net worth of 15 crore as on March 31, 2022 and can apply for licenses by September 30, 2022.

In 2020, guidelines were issued that only approved firms could offer payment services to merchants. Banks don't need approval separately, but non-bank entities offering payment aggregation services had to apply for authorisation by June 2021. They had allowed them to continue their operations until they received communication from the regulators regarding the fate of their application.

There were reports that about 180 applications were made to the RBI and a number of firms have seen their applications rejected due to the fact that they have to meet the criteria to secure a license. A number of applications were rejected and a number of were approved.

They can apply again on meeting the prescribed criteria, but they can't stop operations from being used to disrupt payment systems. It's possible that some PAs had not applied to RBI due to non-fulfilment of eligibility criteria.

Payment aggregation are entities that allow e-commerce sites and merchants to accept various payment instruments from the customers for completion of their payment obligations without the need for merchants to create a separate payment integration system.