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To avoid disruption in payment systems, the Reserve Bank of India (RBI) has decided to allow another window up to September-end 2022 to all non-bank payment aggregators (existing as on March 17, 2020) to submit applications for seeking authorisation under the Payment and Settlement Systems Act, 2007 (PSS Act).
This breather has been given to the payment aggregators (PAs) keeping in view the disruption caused by the Covid -19 pandemic, and to ensure smooth functioning of the payments ecosystem.
PAs can apply by September 30, 2022 and shall have a net worth of ₹15 crore as on March 31, 2022, per a RBI notification. “They shall be permitted to continue their operations till they receive communication from RBI regarding the fate of their application. The timeline of March 31, 2023 for achieving the net worth of ₹25 crore shall, however, remain,” the notification said.
Who are PAs
PAs are entities that facilitate e-commerce sites and merchants to accept various payment instruments from customers for completion of their payment obligations without the need for merchants to create a separate payment integration system of their own.
PAs facilitate merchants to connect with acquirers. In the process, they receive payments from customers, pool and transfer them on to the merchants after a time period.
Earlier RBI directives
As per earlier RBI directives, online non-bank PAs (existing as on March 17, 2020) were required to apply to RBI by September 30, 2021 for seeking authorisation under the Payment and Settlement Systems Act, 2007 (PSS Act).
The RBI noted that applications received from some PAs had to be returned as they had not complied with eligibility criteria, including the minimum net worth criterion of ₹15 crore by March 31, 2021. “This also implied that they have to discontinue their operations within a period of six months from the date of return of application.
“Though they have the option to apply afresh on meeting the prescribed criteria, ceasing operations may lead to disruption in payment systems. It is also possible that some PAs had not applied to RBI due to non-fulfilment of eligibility criteria,” the notification said.
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