RBI allows Payment Aggregators to re-apply for Licence by End of September’22

Digital Payments

Payment aggregators (PAs) whose applications were turned down now have a second chance to apply for a licence through the Reserve Bank of India (RBI).

“Keeping in view the disruption caused by the Covid-19 pandemic, and to ensure smooth functioning of the payments ecosystem, it has been decided to allow another window to all such PAs (existing as on March 17, 2020) to apply to the RBI,” the central bank said.

PAs with a net worth of INR 15 Cr as of March 31, 2022, are eligible to apply by September 30, 2022, according to a directive from the RBI.

Additionally, PAs whose applications had previously been rejected due to non-compliance with the eligibility requirements will be permitted to operate up to the time when RBI contacts them regarding their 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-fulfillment of eligibility criteria,”

The deadline of March 31, 2023, for reaching a net worth of INR 25 Cr, has not changed, according to the RBI.

To make all PAs regulated firms under the Payment and Settlement Systems Act, (2007) RBI introduced a payment aggregator structure in 2020. The recommendations required the PAs to seek a licence to hire merchants and implement digital payment systems.

The central bank will have direct authority over the PAs who are granted a licence. Many industry experts now agree that the payment aggregator framework will result in a more standardised and governed payments ecosystem, although the industry first expressed concern when the framework was announced.

The RBI granted in-principle approval for a payment aggregator licence to several payment firms earlier this month, including Razorpay, Pine Labs, and Innoviti.

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