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3 New player get RBI Approval to Operate as Payment Aggregators in India
RBI Payment Aggregator Approval
Payment aggregators enable online transactions between customers and merchants by providing technology and payment services. The Reserve Bank of India (RBI) guidelines issued in March 2020 require payment aggregator companies approval and regulation for securing customers’ funds and offering payment services.
Recently in February 2024, three companies – Zoho, Juspay and Decentro have received final authorization from the RBI to operate as payment aggregators in India. Zoho is a software-as-a-service company, Juspay is a full-stack payment gateway, and Decentro provides banking solutions using APIs (Application Programming Interfaces).
Securing this license indicates these companies have fulfilled the eligibility criteria set by RBI regarding aspects like net worth, global compliance standards, secure technology for processing payments. The approval allows them to facilitate online transactions by accepting payments from customers on behalf of merchants selling goods and services online across India.
Details of Approved Companies by RBI
- Zoho – enterprise SaaS company
- Juspay – full-stack payment gateway
- Decentro – provides banking APIs
The three entities which have received recent payment aggregator approval from the Reserve Bank of India (RBI) operate across different business areas while enabling online transactions.
Zoho Corporation offers a range of software-as-a-service (SaaS) products for businesses including customer relationship management, finance applications, and collaboration tools. As an established player in enterprise SaaS space, their approval highlights RBI’s recognition of their technological capabilities for secure payment processing.
Juspay is a payment gateway company allowing card, wallet, and UPI-based transactions via their platform and APIs. Payment gateways enable customers’ financial data and money transfer between merchant website and bank. Securing an aggregator license indicates Juspay meets higher financial and compliance standards compared to gateways.
Decentro facilitates neo-banks, digital marketplaces, and financial technology companies to integrate banking and payment solutions using their developer APIs. As an API-based banking-as-a-service provider, Decentro can now broaden their offering by supporting payment acceptance and merchant transactions in a regulated environment.
Significance of Securing RBI License
Obtaining formal authorization from the Reserve Bank of India (RBI) to provide payment aggregation facilities enables companies to offer vital services to online businesses and merchants. Instead of merchants having to build their own payment infrastructure, approved aggregators can accept payments from customers via various methods including bank transfers, debit/credit cards, mobile wallets on behalf of sellers.
The payment aggregator license has stringent technology, security, financial prerequisites specified by RBI to ensure customer data protection and prevent fraudulent transactions. Meeting net worth requirements, global security protocols, and getting regular audit certifications is essential for companies before the license is granted. Hence, clearing RBI criteria highlights that companies like Zoho, Juspay and Decentro have robust systems and processes for securely processing payments in a regulated environment.
Other Major Players with License
Even before latest approvals for Zoho, Juspay and Decentro, a few leading payment technology companies had received clearance from Reserve Bank of India (RBI) to operate as regulated payment aggregators.
In 2022, major fintech brand Razorpay that provides payment collection APIs and tools for businesses along with Cashfree which enables online bank transfers were among the early recipients of this license. Subsequently in January 2023, global payment processor Stripe, food delivery platform Zomato and Tata Group’s Tata Pay also met the eligibility criteria set by RBI for consumer data security, technology protocols and working capital requirements to be granted approval. Granting licenses to established Indian and international organizations validates RBI’s gradual and systematic efforts to regulate the payments ecosystem.
Companies Awaiting Final RBI Approval
Besides companies that have formally secured the payment aggregator licenses from the Reserve Bank of India (RBI), there are other established brands awaiting final approval after initial processing.
Pine Labs that enables in-store and online payments acceptance, Infibeam which runs ecommerce portals, fintech PhonePe along with payment processor Easebuzz have received in-principle nod indicating their applications meet most eligibility checkpoints. However, additional clarifications regarding their processes could be required before getting full clearance. Applications of Dreamplug Technologies which operates payment platform Cred, and online payment gateway PayU are still under review process by RBI suggesting these companies too could get approvals once compliance requirements related to audits, net worth and data security are satisfied completely.
Granting an in-principle approval first highlights RBI’s cautious approach in vetting eligibility, security protocols and technological capabilities before awarding full licenses.
Who are some other major payment aggregators in India?
Leading payment technology companies Razorpay, Cashfree, Stripe, and Tata Group’s Tata Pay are other major entities that have earlier received payment aggregator licenses from the RBI.
What is the difference between payment gateway and aggregator?
While payment gateways enable transactions between merchant websites and banks, payment aggregators provide additional services like multiple payment modes, centralized fund settlement, and detailed reconciliation.
