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After over a year of waiting, the Reserve Bank of India (RBI) granted its final approval for at least six payment aggregator licences on December 19, thus lifting the ban on entities such as RazorPay and Cashfree Payments for acquiring new merchants.
The final nod for the payment aggregator licence has come for Razorpay, Cashfree Payments, Open Financial, EnKash, Google Pay and Paymate India, sources told businessline.
The licences comes over a year after the central bank in December 2022 asked platforms which has in-principal approvals for a payment aggregator licence such as RazorPay, Cashfree Payments, PayU, PineLabs, Paytm and Stripe, among others, to stop on-boarding new merchants till additional documents and audit reports are submitted and a final licence is awarded.
Both RazorPay and Cashfree Payments said that following the receipt of the final approval, they will now be able to on-board new merchants on their payments gateway. The companies said they already have several merchants lined up, that have completed their KYC process and were waiting for the ban to be lifted to be onboarded onto the platform.
Paytm and PayU India are still awaiting their final approvals, as per industry sources. Prior to the temporary curbs, Razorpay, PayU India and Cashfree were estimated to account for 70-80 per cent of new merchant onboarding. The entities had received their in-principal licences July 2022 onwards.
As of December 16, the central bank had granted in-principle authorisation to 37 existing payment aggregators, including names such as Zomato, Amazon Pay, NSDL and PhonePe, among others. In addition, six applications--including for Freecharge--are ‘under process’.
Also read: Decoding RBI’s new rules on bank investments in AIFs
RBI had introduced the payment aggregator framework in March 2020, which mandated that payment gateways will need to obtain an aggregator license to acquire merchants and offer digital payment acceptance solutions.
Payment aggregators facilitate e-commerce websites, mobile apps, and merchants to accept various payment instruments from customers for their transactions, without the need for merchants to create their own payment interface.
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