Business-to-business neobanking platform Open has received in-principle approval from the Reserve Bank of India (RBI) for a payment aggregator (PA) licence, the company said on November 14.
A PA provides payment services to merchants and e-commerce sites by accepting payment instruments from customers. As part of the process, they pool the funds received from customers and transfer them to merchants after a certain time.
"We are delighted to receive the in-principle approval from RBI for our payment aggregator licence and will help us in enhancing our existing product capabilities and innovate new solutions to automate finances for millions of SMEs and small businesses in the country," Open co-founder and chief executive officer Anish Achuthan said.
In a new set of guidelines in March 2020, the RBI mandated that all PAs be authorised by the central bank. The regulator told non-banking companies offering PA services to apply for authorisation by June 30, 2021, a deadline which was extended to September 30, 2021.