The Reserve Bank of India (RBI) has directed the payment solutions provider PayU India to reapply for the payment aggregator licence within the next 120 days.
“We will work with them over the next 120 days to address some aspects and to resubmit our application. One of the key aspects is the simplification of our corporate structure and we are already quite well progressed with some suggested solutions,” a PayU spokesperson said.
This comes two months after the RBI rejected the application of Paytm Payments Services (PPSL) for licence to operate as a payment aggregator.
Following this move, PayU has paused onboarding new merchants for its online payment aggregation business.
“There is no impact to our existing online merchants to whom services will continue as usual,” the PayU spokesperson said in an official statement.
Other businesses of PayU Payments including offline and Bharat Bill Payment System (BBPS) are not impacted and can continue as usual and new merchants can be onboarded, the statement added.
Fintech unicorn Razorpay, one of the country’s leading payment gateways, had also paused the onboarding of new online merchants to comply with a communication that it received from the RBI. Moneycontrol was the first to report the developments on December 16.
In July last year, Pine Labs, Razorpay, and American payments player Stripe became the first ones to receive in-principle approval for the payment aggregator licence. In December, digital payment processing firm Worldline ePayments India and fintech startup Paysharp had also received in-principle authorisation from the RBI to act as a PA.
On Tuesday, Fintech unicorn BharatPe received an in-principle authorisation from the RBI to operate as an online payment aggregator.
A payment aggregator provides payment services to merchants and e-commerce sites by accepting payment instruments from customers. They pool the funds received from customers and transfer them to merchants after a certain time.
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