Razorpay gets RBI approval in principle for payment aggregator license
Credit and financing for MSMEs: B2B payments and banking platform Razorpay has today confirmed that it has received approval in principle from the RBI for a payment aggregator (PA) license.
The RBI had issued guidelines in March 2020 to regulate intermediaries (payment aggregators and payment gateways) that facilitate payments in the online space. It defines “payment aggregators” as entities that act as intermediaries in the processing of funds. They allow merchants and e-commerce sites to accept payments from customers by integrating the payment service into the merchant’s payment system. The payment aggregator receives payments from customers and then transfers them to merchants.
According to the notification, payment aggregators who had a net worth of ₹15 crore as of March 31, 2021 could apply for the license and they will have to maintain a net worth of ₹25 crore by the end of the current financial year and time. after.
Subscribe now to the Financial Express SME newsletter: your weekly dose of news, views and updates from the world of micro, small and medium enterprises
During the announcement, Harshil Mathur, CEO and Co-Founder of Razorpay said, “With the digital payments space falling under direct RBI regulation, we can expect to not only see a huge upsurge in adoption and confidence in online payments, but also to witness an amplified increase. in digital payment innovations in the years to come. With this trust placed in us, we will continue to build the financial backbone of businesses in India, a more cashless, frictionless, secure and connected backbone. Razorpay currently provides its payment solutions and financial services to more than eight million businesses nationwide.
Bhushan Parekh, Director of CRISIL SME Solutions, says: “The rationale for regulation is to weed out companies at the bottom of the pyramid and protect consumer interests. No good company will have a challenge adhering to the checks and balances put in place by the regulator.
About 185 companies submitted the proposal to RBI to obtain the payment aggregator license, according to the company statement. Payment platforms such as 1Pay, PineLabs and Stripe have also recently received payment aggregator license approval from the RBI.