Razorpay, Pine Labs among firsts to get RBI nod for payment aggregator licences
Premium- RBI had returned a majority of payment aggregator licence applications
Online payment providers Razorpay and Pine Labs are among the first ones which have received the in-principle nod from the Reserve Bank of India (RBI) for a payment aggregator, gateway license, as per a report by ET.
The move comes after the central bank had returned a large number of payment aggregator licence applications earlier this year, that it had received from many firms. The RBI is now expected to release a complete list of the players who have been approved to operate as payment aggregators in the country shortly, the report added.
All companies applying for the licence were mandated to have a net-worth of ₹15 crore as of 31 March 2021. This startup’s net-worth was lower but the CEO still took a chance with the application—many in the payments industry assumed the RBI would be flexible with the net-worth requirement. Payment aggregators are crucial for online payments, such companies receive, process, pool and transfer user payments to merchants.
About 180 firms applied for licences last year, which include BillDesk, PayU, Razorpay, CCAvenue, Cashfree Payments, Paytm, MobiKwik, BharatPe, PhonePe, Juspay, Google, Amazon, Cred, Bajaj Finserv, Zomato, M2P Fintech (through Livquik), Instamojo, SafexPay, and FSS. Of which, over 100 applications, which included MobiKwik, were either rejected or returned and the companies, whose applications have been returned may be allowed to re-apply after a year, as per reports.
Earlier, all the companies in the business of processing payments were simply called ‘payment gateways’. But now, while payment aggregators will facilitate payments to merchants by handling the money, payment gateways will just offer the technology platform—they won’t get involved in the settlement of funds.